Presented below is information related to Carla Corp., which sells merchandise with terms 2/10, net 60....

Presented below is information related to Carla Corp., which sells merchandise with terms 2/10, net 60. Carla Corp. records its sales and receivables net.

July 1		Carla Corp. sold to Warren Harding Co. merchandise having a sales price of $15,000.
5		Accounts receivable of $14,300 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.)
9		Specific accounts receivable of $14,300 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,500 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.)
Dec. 29		Warren Harding Co. notifies Carla that it is bankrupt and will pay only 10% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.)

Prepare all necessary entries in general journal form for Carla Corp. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date	Account Titles and Explanation	Debit	Credit
7/17/57/97/1112/29

7/5



7/17/57/97/1112/29

	(To record discount forfeited)
7/9


	(To record notes payable)
7/17/57/97/1112/29

7/17/57/97/1112/29

show work and explain

Expert Solution

Answer:

Date	Particulars	Debit ($)	Credit ($)
1-jul	Accounts receivable - warren harding co	14700
	Sales revenue (15000*(100%-2%))		14700
	(To record the sales on account)
5-jul	Cash (14300*(100%-9%))	13013
	Loss on sale of receivable (14300*9%)	1287
	Accounts receivable (14300*98%)		14014
	Sales discount forfeited (14300*2%)		286
	(To record the accounts receivable factored)
9-jul	Accounts receivable (14300*2%)	286
	Sales discount forfeited		286
	(To record discount forfeited)
9-jul	Cash (6500*(100%-6%))	6110
	Interest expense (6500*6%)	390
	Notes payable		6500
	(To record notes payable)
11-jul	Accounts receivable - warren harding company	300
	Sales discount forfieted (15000*2%)		300
	(To record discount forfeited)
29-dec	Allowance for doubtful accounts (15000*(100%-10%))	13500
	Acconts receivable - warren harding co		13500
	(To record the accounts written off)

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