Question

In: Accounting

Problem 8-6A On January 1, 2017, Novak Corp. had Accounts Receivable of $54,300 and Allowance for...

Problem 8-6A

On January 1, 2017, Novak Corp. had Accounts Receivable of $54,300 and Allowance for Doubtful Accounts of $3,700. Novak Corp. prepares financial statements annually. During the year, the following selected transactions occurred:

Jan.  5 Sold $3,600 of merchandise to Rian Company, terms n/30.
Feb.  2 Accepted a $3,600, 4-month, 9% promissory note from Rian Company for balance due.
12 Sold $10,800 of merchandise to Cato Company and accepted Cato’s $10,800, 2-month, 10% note for the balance due.
26 Sold $12,200 of merchandise to Malcolm Co., terms n/10.
Apr.  5 Accepted a $12,200, 3-month, 9% note from Malcolm Co. for balance due.
12 Collected Cato Company note in full.
June  2 Collected Rian Company note in full.
15 Sold $2,000 of merchandise to Gerri Inc. and accepted a $2,000, 6-month, 13% note for the amount due.


Journalize the transactions. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Solutions

Expert Solution

Journal entries :

Date account and explanation debit credit
Jan 5 Account receivable- Rian Company 3600
Sales revenue 3600
(To record sales)
Feb 2 Notes receivable- Rian Company 3600
Account receivable- Rian Company 3600
(To record notes)
Feb 12 Account receivable-Cato's 10800
Sales revenue 10800
(To record sales)
Feb 26 Account receivable-Malcolm Co 12200
Sales revenue 12200
(To record sales)
Apr 5 Notes receivable-Matcolm Co 12200
Account receivable-Malcolm Co 12200
(To record notes)
June 12 Cash 10980
Notes receivable-Cato's company 10800
Interest revenue (10800*12%*2/12) 180
(To record amount collected)
June 12 Cash 3708
Notes receivable-Rian Co 3600
Interest revenue (3600*9%*4/12) 108
(TO record collection)
JUne 15 Notes receivable-Gerri Inc. 2000
Sales revenue 2000
(To record sales)

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