Oak Supply Corp. has the following selected transactions for notes receivable. R

Question

Oak Supply Corp. has the following selected transactions for notes receivable.

Record the above transactions for Oak Supply Corp. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to the nearest whole dollar, e.g. 5,275.)

Nov. 1 Lent $117,000 cash to A. Bouchard on a one-year, 9% note. Dec. 1 Sold goods to Wright, Inc., receiving a two-month, 6%, $22,100 note. The goods cost $13,600. 15 Received a six-month, 6%, $24,000 note in exchange for an account from Aquilina Corporation. Feb. 1 Collected the amount owing on the Wright note. 28 Accrued interest on all notes receivable at year end. Interest is calculated to the nearest half month and is due at maturity. 28 Analyzed each note and estimated that uncollectible notes at year end totalled $18,500. Debit Credit (To record sales) To record cost of merchandise sold) To accrue interest)

Explanation / Answer

Recording of the transactions for Oak Supply Corp. Date Account Titles and Explanation Debit Credit Nov.1 9% Note Receivable (A.Bouchard) $117,000 Cash $117,000 (to record money lent on one year Note) Dec.1 6% Note Receivable (Wright Inc.) $22,100 Sales $22,100 (to record on account sales against note) Dec.1 Cost of goods sold $13,600 Inventory $13,600 (to record cost of merchandise sold) Dec.15 6% Note Receivable (Aquilina Corporation) $24,000 Aquilina Corporation $24,000 (to record receipt of 6 month note in exchange for an account) Feb.1 Cash $22,321 Interest Income $221 6% Note Receivable (Wright Inc.) $22,100 (to record amount collected on Wright Note with interest) Feb.28 Interest Receivable on Note $3,810 Interest Income $3,810 (to accrue interest) Feb.28 Bad Debt Expense $18,500 Allowance for uncollectible note $18,500 (to record estimate of uncollectible accounts) Interest accrued calculation Interest accrued on 9% note to A. Bouchard = [$117000*9%/12 months]*4 months = $3510 Interest accrued on 6% note to Aquilina Corporation = [$24000*6%/12 months]*2.5 months = $300

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