Accounting for uncollectible accounts (aging-of-receivables method), Learnig eivable, and accrued interest revenue Sierpy Reeiner Chairs completed the following selected transactions:
2018
Jul.1 Sold merchandise inventory to Stan-Mart, receiving a $41,000, nine-month, 8% note. Ignore Cost of Goods Sold.
Oct. 31 Recorded cash sales for the period of $24,000. Ignore Cost of Goods Sold.
Dec. 31 Made an adjusting entry to accrue interest on the Stan-Mart note.
Dec. 31 Made an adjusting entry to record bad debt expense based on an aging of
accounts receivable.
The aging schedule shows that $13,800 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts is $11,800.
2019
Apr. 1 Collected the maturity value of the Stan-Mart note.
Jun. 23 Sold merchandise inventory to Appeal, Corp., receiving a 60-day, 6% note
for $7,000. Ignore Cost of Goods Sold.
Aug. 22 Appeal, Corp. dishonored its note at maturity; the business converted the
maturity value of the note to an account receivable.
Nov. 16 Loaned $17,000 cash to Crosby, Inc., receiving a 90-day, 16% note.
Dec. 5 Collected in full on account from Appeal, Corp. Dec.
31 Accrued the interest on the Crosby, Inc. note.
Record the transactions in the journal of Sleepy Recliner Chairs.