Entries for Receipt and Dishonor of Notes Receivable Journalize the following tr

Question

Entries for Receipt and Dishonor of Notes Receivable

Journalize the following transactions in the accounts of Missouri Gaming Co., which operates a riverboat casino. Assume 360 days in a year. If an amount box does not require an entry, leave it blank. Round final answers to the nearest cent when necessary.

Mar. 29. Received a $14,400, 60-day, 8% note dated March 29 from Karie Platt on account. Apr. 30. Received a $25,800, 60-day, 6% note dated April 30 from Jon Kelly on account. May 28. The note dated March 29 from Karie Platt is dishonored, and the customer's account is charged for the note, including interest. June 29. The note dated April 30 from Jon Kelly is dishonored, and the customer's account is charged for the note, including interest. Aug. 26. Cash is received for the amount due on the dishonored note dated March 29 plus interest for 90 days at 12% on the total amount debited to Karie Platt on May 28. Oct. 22. Wrote off against the allowance account the amount charged to Jon Kelly on June 29 for the dishonored note dated April 30.

Explanation / Answer

Date

Account Title & Explanation

Debit

Credit

March 29

Note receivable

$14400

     Acccounts receivable

$14400

(For recording note received from Karie Platt on account.)

Apr. 30

Note receivable

$25800

     Acccounts receivable

$25800

(For recording note received from Jon Kelly on account.)

May 28

Acccounts receivable

$14592

     Note receivable

$14400

     Interest

$192

(For recording dishonored of note dated March 29)

June 29

Acccounts receivable

$26058

     Note receivable

$25800

     Interest

$258

(For recording dishonored of note dated April 30)

Aug. 26

Cash

$15030

    Accounts receivables

$14592

    Interest

$438

(For recording amount received from Karie Platt )

Oct. 22

Bad Debt Allowance

$26058

    Accounts receivable

$26058

(For Wrote off against the allowance account the amount charged to Jon Kelly.)

Working Note;

1. Amount of interest on May 28 is calculated as follow;

($14400 * 8 * 60 / 100 * 360) = $192

2. Amount of interest on June 29 is calculated as follow;

($25800 * 6 * 60 / 100 * 360) = $258

3. Amount of interest on Aug 26 is calculated as follow;

($14592 * 12 * 90 / 100 * 360) = $437.76 or $438

Date

Account Title & Explanation

Debit

Credit

March 29

Note receivable

$14400

     Acccounts receivable

$14400

(For recording note received from Karie Platt on account.)

Apr. 30

Note receivable

$25800

     Acccounts receivable

$25800

(For recording note received from Jon Kelly on account.)

May 28

Acccounts receivable

$14592

     Note receivable

$14400

     Interest

$192

(For recording dishonored of note dated March 29)

June 29

Acccounts receivable

$26058

     Note receivable

$25800

     Interest

$258

(For recording dishonored of note dated April 30)

Aug. 26

Cash

$15030

    Accounts receivables

$14592

    Interest

$438

(For recording amount received from Karie Platt )

Oct. 22

Bad Debt Allowance

$26058

    Accounts receivable

$26058

(For Wrote off against the allowance account the amount charged to Jon Kelly.)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.