ys, use a 360 -day year. Round to the nearest dollar.) (Record debits first, the

Question

ys, use a 360 -day year. Round to the nearest dollar.) (Record debits first, then credits. Exclu -x More Info 2016 Jul 1 Sold merchandise inventory to Great-Mart, receiving a $45,000, Oct 31 Recorded credit and debit card sales for the period of $22,000. Use Nov. 3 Card processor drafted company's checking account for processing Dec 31 Made an adjusting entry to accrue interest on the Great-Mart note. nine-month, 8% note. Ignore Cost of Goods Sold. the gross method Ignore Cost of Goods Sold fee of $410 31 Made an adjusting entry to record bad debt expense based on an aging of accounts receivable. The aging schedule shows that $15,200 of accounts receivable will not be collected Prior to this adjustment, the credit balance in Allowance for Bad Debts is $10,500 2017 Apr. 1 Collected the maturity value of the Great-Mart note. Jun, 23 Sold merchandise inventory to Aglow. Corp., receiving a 60-day, 6% note for $11.000. Ignore Cost of Goods Sold Aug 22 Aglow. Corp dishonored its note at maturity the business converted the maturity value of the note to an account receivable Nov. 16 Loaned $21,000 cash to Crane, Inc., receiving a 90-day, 16% note. Dec. 5 Collected in full on account from Aglow, Corp 31 Accrued the interest on the Crane, Inc. note PrintDone

Explanation / Answer

date accounts Dr Cr 01-Jul notes receivable 45000 sales 45000 31-Oct cash 22000 sales 22000 03-Nov Processing Fees 410 cash 410 31-Dec Accrued Interest 1800 interest=.08*6/12*45000 = 1800 Interest on note receivable 1800 31-Dec Bad Debts expense 4700 15200-10500(credit balance)= 4700 allowance for bad debts 4700 2017 01-Apr cash 47700 interest=.08*9/12*45000 = 2700 notes receivable 45000 accrued interest 1800 Interest on note receivable 900 23-Jun notes receivable 11000 sales 10000 22-Aug accounts receivable 11110 interest = 0.06*(60/360 )*11000= 110 notes receivable 11000 Interest on note receivable 110 16-Nov notes receivable 21000 cash 21000 05-Dec cash 11110 accounts receivable 11110 31-Dec Accrued Interest 420 interest = 0.16*(45/360 )*11000= 420 Interest on note receivable 420

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