entries for the following transactions of Viking suming they use the allowance m

Question

entries for the following transactions of Viking suming they use the allowance method to account for uncollectible accounts. Sold $2,500 of merchandise to Arthur Co., receiving an 8%, 90-day, $2,500 note. Wrote off $1,500 owed by Network Co. Received a S6.000, 5%, 30-day note receivable from Calvin Co. as exchange for its S6,000 account receivable. Apr 1 15 30 May June July 30 The note received from Calvin on April 30 was collected in full. 30 Arthur Co. Was unable to pay the note on the due date 15Network Co. paid $1,000 of the amount written off on April 15

Explanation / Answer

Journal

Date Account Name Debit Credit Apr 1 Note receivable $2500 Sales revenue $2500 Apr 15 Allowance for doubtful accounts 1500 Accounts receivable 1500 Apr 30 Note receivable 6000 Accounts receivable 6000 May 30 Cash 6025 Interest revenue ($6000 x 5% x 30/360) 25 Note receivable 6000 June 30 Accounts receivable 2500 Note receivable 2500 July 15 Accounts receivable 1000 Allowance for doubtful accounts 1000 July 15 Cash 1000 Accounts receivable 1000

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