1. Journalize the following transactions in the accounts of Simmons Company: Mar
ID: 2577975 • Letter: 1
Question
1. Journalize the following transactions in the accounts of Simmons Company: Mar. I Rccc ived a S60,000, 60-day, 6% note dated March 1 from Bynum Co. on account. 18 Received a $25,000, 60-day, 9% note dated March 18 from Solo Co. on account. Apr. 30 The note dated March 1 from Bynum Co. is dishonored, and the customer's account is charged for the note, including interest. May 17 The note dated March 18 from Solo Co. is dishonored, and the customer's account is charged for the note, including interest. July 29 Cash is r cci ved fr thc amount duc on thc dishonor d nolc datcd March 1 plus intcres1 for 90 days at 8 % on tlhe total amount debited to Bynum Co. on April 30. Aug. 23 Wrote off against the allowance account the amount charged to Solo Co. on May 17 for the dishonored note dated March 18.Explanation / Answer
Calculation:
1. Interest revenue = (60000*6%)*60/360 = $600
2. Interest revenue = (25000*9%)*60/360 = $375
3. Interest revenue = (60600*8%)*90/360 = $1212
Note: 360 days a year has been taken.
Date Particulars Dr. $ Cr. $ Mar 01 6% Notes Receivable A/c 60,000 Accounts Receivable 60,000 (6% notes received from Bynum Co. for days) Mar 18 9% Notes Receivable A/c 25000 Accounts Recevable 25000 (9% notes received from Solo Co. for 60 days) Apr 30 Accounts Recevable 60600 6% Notes Receivable A/c 60000 Interest Revenue1 600 (Notes issued on Mar01 is dishonoured and charged back with interest) May 17 Accounts Receivable 25375 9% Notes Receivale A/c 25000 Interest Revenue2 375 (Notes issued on Mar18 is dishonoured and charged back with interest) Jul 29 Cash A/c 61812 Accounts Receivable 60600 Interest Revenue3 1212 (Cash received for the note dishonoured on Apr30 with 8% interest) Aug 23 Allowance for Doubtful Accounts 25375 Accounts Receivables 25375 (Written off the notes issued by Solo Co.)Related Questions
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