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Sales and Notes Receivable Transactions The following were selected from among the transactions completed during the...

Sales and Notes Receivable Transactions

The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

Jan. 21. Sold merchandise on account to Black Tie Co., $39,900. The cost of merchandise sold was $23,940.
Mar. 18. Accepted a 60-day, 8% note for $39,900 from Black Tie Co. on account.
May 17. Received from Black Tie Co. the amount due on the note of March 18.
June 15. Sold merchandise on account to Pioneer Co. for $15,600. The cost of merchandise sold was $9,360.
21. Loaned $18,000 cash to JR Stutts, receiving a 30-day, 6% note.
25. Received from Pioneer Co. the amount due on the invoice of June 15.
July 21. Received the interest due from JR Stutts and a new 60-day, 9% note as a renewal of the loan of June 21. (Record both the debit and the credit to the notes receivable account.)
Sept. 19. Received from JR Stutts the amount due on her note of July 21.
22. Sold merchandise on account to Wycoff Co., $60,000. The cost of merchandise sold was $36,000.
Oct. 14. Accepted a 60-day, 6% note for $60,000 from Wycoff Co. on account.
Nov. 13. Wycoff Co. dishonored the note dated October 14.
Dec. 28. Received from Wycoff Co. the amount owed on the dishonored note, plus interest for 15 days at 12% computed on the maturity value of the note.

Required:

Journalize the entries to record the transactions. Assume 360 days in a year. For a compound entry, if an amount box does not require an entry, leave it blank.

Jan. 21-sale
Jan. 21-cost
Mar. 18
May 17
June 15-sale
June 15-cost
June 21
June 25
July 21
Sept. 19- note
Sept. 22-sale
Sept. 22-cost
Oct. 14
Nov. 13
Dec. 28

Solutions

Expert Solution

SOLUTION

Date Accounts titles and Explanation Debit ($) Credit ($)
Jan.21 Accounts receivabe- Black tie co. 39,900
Sales 39,900
Cost of merchandise sold 23,940
Merchandise inventory 23,940
Mar.18 Notes receivable 39,900
Accounts receivabe- Black tie co. 39,900
May 17 Cash 40,432
Notes receivable 39,900
Interest revenue (39,900*8%*60/360) 532
June 15 Accounts receivable-Pioneer Co. 15,600
Sales 15,600
Cost of merchandise sold 9,360
Merchandise inventory 9,360
June 21 Notes recievable 18,000
Cash 18,000
June 25 Cash 15,600
Accounts receivable-Pioneer Co. 15,600
July 21 Notes receivable 18,000
Cash 90
  Notes receivable 18,000
Interest revenue (18,000*6%*30/360) 90
Sept.19 Cash 18,270
Notes receivable 18,000
Interest revenue (18,000*9%*60/360) 270
Sept.22 Accounts receivable-Wycoff Co. 60,000
Sales 60,000
Cost of merchandise sold 36,000
Merchandise inventory 36,000
Oct.14 Notes receivable 60,000
  Accounts receivable-Wycoff Co. 60,000
Nov.13 Accounts receivable-Wycoff Co. 60,600
Notes receivable 60,000
Interest revenue (60,000*6%*60/360) 600
Dec.28 Cash 60,903
Accounts receivable-Wycoff Co. 60,600
Interest revenue (60,600*12%*15/360) 303

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