b. Set up T we and insert the J anuary 1, 2015, halances in AR, gross and A DA,
ID: 2572696 • Letter: B
Question
b. Set up T we and insert the J anuary 1, 2015, halances in AR, gross and A DA, them posa tve enteives as e to be $100,000(i.e. entry to accrue interest on the Kroger note Dec sr(b Made an AJE to record Bad Debt Expense based on an aging of AR The a $197,400 of A/R will not be collected. The unadiusted balance in Alow. for CkFig: 2015 revenues amount to $405 Sold the Bliss Co. note to U.S. Bank, received cash of $3.810. (vou need an interest acerual alsa Loaned $15,000 cash to McNeil, Inc., receiving a Dec 31(b) AJE t o record Bad Debt Ex A/R will likely not be collected. The unadjusted balance in Allow. for Doubtful Accts is Prepare all n journal entries for years 2014 and 2015Explanation / Answer
Date Account Title and Explanation Debit Credit 2014 1-Nov 6% Note Receivable $24,000 Revenue $24,000 (To record the sales) Dec. 31 (A) Accrued Interest Income $120 Interest Income $120 (To record interest accrued) *(($24,000 x 6%) / 12) Dec. 31 (B) Bad Debt Expense $178,100 Allowance for uncollectible accounts $178,100 (To record bad debt expense) 2015 1-Feb Cash $24,360 6% Note Receivable $24,000 Accrued Interest Income $120 Interest Income $240 (To record maturity of note receivable) 23-Feb 15% Note Receivable $4,000 Accounts Receivable $4,000 (To record the receipt of account receivable) 31-Mar Accrued Interest Income $60 Interest Income $60 (To record interest accrued) *(($4,000 x 15%) / 360) x 36 Assume 360 days year 31-Mar Cash $3,810 Loss on sale of note receivable $250 15% Note Receivable $4,000 Accrued Interest Income $60 (To record sale of note receivable) 16-Nov 12% Note Receivable $15,000 McNeil Inc. $15,000 (To record note receivable received for loan given) Dec 31 (A) Accrued Interest Income $225 Interest Income $225 (To record interest accrued) *(($15,000 x 12%) / 360) x 45 Assume 360 days year Dec. 31 (B) Bad Debt Expense $251,100 Allowance for uncollectible accounts $251,100 (To record bad debt expense)
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