The following were selected from among the transactions completed by Caldemeyer
ID: 2486430 • Letter: T
Question
The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems.
Journalize the entries to record the transactions. Refer to the Chart of Accounts for exact wording of account titles. There should be 36 line entries.
Jan. 3. Loaned $15,600 cash to Trina Gelhaus, receiving a 90-day, 8% note. Feb. 10. Sold merchandise on account to Bradford & Co., $28,200. The cost of the merchandise sold was $16,920. 13. Sold merchandise on account to Dry Creek Co., $64,800. The cost of merchandise sold was $58,320. Mar. 12. Accepted a 60-day, 6% note for $28,200 from Bradford & Co. on account. 14. Accepted a 60-day, 9% note for $64,800 from Dry Creek Co. on account. Apr. 3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.) May 11. Received from Bradford & Co. the amount due on the note of March 12. 13. Dry Creek Co. dishonored its note dated March 14. July 12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note. Aug. 1. Received from Trina Gelhaus the amount due on her note of April 3. Oct. 5. Sold merchandise on account to Halloran Co., $14,800, net/30. The cost of the merchandise sold was $8,880. 15. Received from Halloran Co. the amount of the invoice of October 5.Explanation / Answer
Date
Account Titles and Explanation
Debit
Credit
Jan 3
132 Notes Receivable A/c Dr.
$15,600
To 110 Cash A/c
$15,600
(Given Loan to Trina Gelhaus and received a note for the amount)
Feb 10
121 Accounts Receivable – Bradford & Co. A/c Dr.
$28,200
To 410 Sales A/c
$28,200
510 Cost of Merchandise Sold A/c Dr.
$16,920
To 141 Merchandise Inventory A/c
$16,920
(Record Sale on account and cost of Merchandise sold)
Feb 13
122 Accounts Receivable – Dry Creek Co. A/c Dr.
$64,800
To 410 Sales A/c
$64,800
510 Cost of Merchandise Sold A/c Dr.
$58,320
To 141 Merchandise Inventory A/c
$58,320
(Record Sale on account and cost of Merchandise sold)
Mar 12
132 Notes Receivable A/c Dr.
$28,200
To 121 Accounts Receivable – Bradford & Co. A/c
$28,200
(Received Notes from Bradford & Co. for the amount due for the sale of goods)
Mar 14
132 Notes Receivable A/c Dr.
$64,800
To 122 Accounts Receivable – Dry Creek Co. A/c
$64,800
(Received Notes from Dry Creek Co. for the amount due for the sale of goods)
Apr 3
110 Cash A/c Dr.
$312
To 610 Interest Revenue A/c
$312
132 Notes Receivable A/c Dr.
$15,600
To 132 Notes Receivable A/c
$15,600
(Received Interest for Note on Jan 3 and renewed the Note for 120-day, 9%)
May 11
110 Cash A/c Dr.
$28,482
To 610 Interest Revenue A/c
$282
To 132 Notes Receivable A/c .
$28,200
(Received the amount due on Note from Bradford & Co)
May 13
538 Bad Debt Expense A/c Dr.
$64,800
To 132 Notes Receivable A/c
$64,800
(Dishonor of the Note given to Dry Creek co)
Jul 12
110 Cash A/c Dr.
$66,115.44
To 610 Interest Revenue A/c
$1,315.44
To 538 Bad Debt Expense A/c
$64,800
(Received money from Dry Creek Co on the dishonored note with additional interest)
Aug 1
110 Cash A/c Dr.
$16,068
To 610 Interest Revenue A/c
$468
To 132 Notes Receivable A/c .
$15,600
(Received the amount due on Note from Trina Gelhaus)
Oct 5
124 Accounts Receivable – Halloran Co. A/c Dr.
$14,800
To 410 Sales A/c
$14,800
510 Cost of Merchandise Sold A/c Dr.
$8,800
To 141 Merchandise Inventory A/c
$8,800
(Record Sale on account and cost of Merchandise sold)
Oct 15
110 Cash A/c Dr.
$14,800
To 124 Accounts Receivable – Halloran Co. A/c
$14,800
(Received the amount due from Halloran Co)
Apr 3 - Interest on Notes receivable for 90-Day 8% Note of $15,600 from Trina Gelhaus will be
$15,600 * (8%/360 *90) = $312
May 11 – Interest on Notes receivable from Bradford & Co. for 60-day 6% Note of $28,200 will be
$28,200 * (6%/360*60) = $282
Jul 12 – Maturity value of 60 day 9% Note of $64,800 on May 13 was
$64,800 + ($64,800 * (9%/360*60)) = $64,800 + $972 = $65,772.
On the Maturity Value Interest of 12% paid for 60 days. So Interest will be
$65,772 * (12%/360*60) = $1,315.44
So Amount Dishonored is $64,800, as we did not recognize interest as receivable at the inception.
Total Interest paid will be $1,315.44
Cash Received will be $64,800 + $1,315.44 = $66,115.44
Aug 1- Interest on Notes receivable for 120-Day 9% Note of $15,600 from Trina Gelhaus will be
$15,600 * (9%/360 *120) = $468
Date
Account Titles and Explanation
Debit
Credit
Jan 3
132 Notes Receivable A/c Dr.
$15,600
To 110 Cash A/c
$15,600
(Given Loan to Trina Gelhaus and received a note for the amount)
Feb 10
121 Accounts Receivable – Bradford & Co. A/c Dr.
$28,200
To 410 Sales A/c
$28,200
510 Cost of Merchandise Sold A/c Dr.
$16,920
To 141 Merchandise Inventory A/c
$16,920
(Record Sale on account and cost of Merchandise sold)
Feb 13
122 Accounts Receivable – Dry Creek Co. A/c Dr.
$64,800
To 410 Sales A/c
$64,800
510 Cost of Merchandise Sold A/c Dr.
$58,320
To 141 Merchandise Inventory A/c
$58,320
(Record Sale on account and cost of Merchandise sold)
Mar 12
132 Notes Receivable A/c Dr.
$28,200
To 121 Accounts Receivable – Bradford & Co. A/c
$28,200
(Received Notes from Bradford & Co. for the amount due for the sale of goods)
Mar 14
132 Notes Receivable A/c Dr.
$64,800
To 122 Accounts Receivable – Dry Creek Co. A/c
$64,800
(Received Notes from Dry Creek Co. for the amount due for the sale of goods)
Apr 3
110 Cash A/c Dr.
$312
To 610 Interest Revenue A/c
$312
132 Notes Receivable A/c Dr.
$15,600
To 132 Notes Receivable A/c
$15,600
(Received Interest for Note on Jan 3 and renewed the Note for 120-day, 9%)
May 11
110 Cash A/c Dr.
$28,482
To 610 Interest Revenue A/c
$282
To 132 Notes Receivable A/c .
$28,200
(Received the amount due on Note from Bradford & Co)
May 13
538 Bad Debt Expense A/c Dr.
$64,800
To 132 Notes Receivable A/c
$64,800
(Dishonor of the Note given to Dry Creek co)
Jul 12
110 Cash A/c Dr.
$66,115.44
To 610 Interest Revenue A/c
$1,315.44
To 538 Bad Debt Expense A/c
$64,800
(Received money from Dry Creek Co on the dishonored note with additional interest)
Aug 1
110 Cash A/c Dr.
$16,068
To 610 Interest Revenue A/c
$468
To 132 Notes Receivable A/c .
$15,600
(Received the amount due on Note from Trina Gelhaus)
Oct 5
124 Accounts Receivable – Halloran Co. A/c Dr.
$14,800
To 410 Sales A/c
$14,800
510 Cost of Merchandise Sold A/c Dr.
$8,800
To 141 Merchandise Inventory A/c
$8,800
(Record Sale on account and cost of Merchandise sold)
Oct 15
110 Cash A/c Dr.
$14,800
To 124 Accounts Receivable – Halloran Co. A/c
$14,800
(Received the amount due from Halloran Co)
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