On January 1, 2020, Harter Company had Accounts Receivable $139,000,
Notes Receivable $25,000, and Allowance for Doubtful Accounts $13,200.
The note receivable is from Willingham Company. It is a 4-month, 9% note
dated December 31, 2019. Harter Company prepares financial statements
annually at December 31. During the year, the following selected transactions
occurred.
Jan. 5 Sold $20,000 of merchandise to Sheldon Company,
terms n/15.
20 Accepted Sheldon Company’s $20,000, 3-month, 8%
note for balance due.
Feb. 18 Sold $8,000 of merchandise to Patwary Company and
Accepted Patwary’s $8,000, 6-month, 9% note for the
amount due.
Apr. 20 Collected Sheldon Company note in full.
30 Received payment in full from Willingham Company
on the amount due.
May 25 Accepted Potter Inc.’s $6,000, 3-month, 7% note in
settlement of a past-due balance on account.
Aug. 18 Received payment in full from Patwary Company on
note due.
25 The Potter Inc. note was dishonored. Potter Inc. is not
bankrupt; future payment is anticipated.
Sept. 1 Sold $12,000 of merchandise to Stanbrough Company
and accepted a $12,000, 6-month, 10% note for the
amount due.
Instructions: Journalize the transactions. (Omit cost of goods sold
entries.)

Solution and Explanation:

DateParticularsPost ref.         Debit ($)    Credit ($)

5- JanAccounts Receivable  20000  

Sales revenue                                                     20000

(To record the sales revenue)    

5- JanNotes Receivable         30000  

Accounts receivable                                              30000

(To record the sales revenue)  

18- FebNotes receivable          8000  

Sales revenue                                                         8000

(To record the notes receivable and sales revenue)  

20- AprilCash                        20400  

Notes receivable                                 20000

Interest revenue                                   400

(To record the collection of notes)    

30 aprilCash                           25000  

Notes receivable                                 25000

(to record the collection of payment due)    

25 MayNotes receivable         6000  

Accounts receivable                            6000

( To record the note settlement of past due balance)    

18- AugCash account               8360  

Notes receivable                                      8000

Interest revenue                                         360

(To record the collection of notes payment)    

25- AugAccounts receivable  6135  

Notes receivable                                      6000

Interest revenue                                         135

1-SepNotes receivable            12000  

Sales revenue                                        12000

(To record the note for amount due)    

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