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Journal Entries for Accounts and Notes Receivable Lancaster, Inc., began business on January 1. Certain transactions...

Journal Entries for Accounts and Notes Receivable
Lancaster, Inc., began business on January 1. Certain transactions for the year follow:

Jun.8 Received a $19,000, 60 day, eight percent note on account from R. Elliot.
Aug.7 Received payment from R. Elliot on her note (principal plus interest).
Sep.1 Received a $22,000, 120 day, nine percent note from B. Shore Company on account.
Dec.16 Received a $18,400, 45 day, ten percent note from C. Judd on account.
Dec.30 B. Shore Company failed to pay its note.
Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc., uses the allowance method
of providing for credit losses.
Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off
during this first year have created a debit balance in the Allowance for Doubtful Accounts of
$22,600. An analysis of aged receivables indicates that the desired balance of the
allowance account should be $18,500.
Dec.31 Made the appropriate adjusting entries for interest.


Required
Record the foregoing transactions and adjustments in general journal form. (Use 360 days for all interest calculations. Round all Interest Income calculations to the nearest dollar.)

General Journal
Date Description Debit Credit
Jun.8 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
Received a 60-day, 8 percent note on account.
Aug.7 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
Notes Receivable-R. Elliot Answer Answer
To record receipt of principal plus interest from R. Elliot.
Sep.1 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
Received a 120-day, 9 percent note on account.
Dec.16 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
Received a 45-day, 10 percent note on account.
Dec.30 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
Notes Receivable-B. Shore Company Answer Answer
To record dishonoring of B. Shore Company's note.
Dec.31 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
To write off B. Shore's account.
Dec.31 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
To record allowance for uncollectible accounts.
Dec.31 AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
AnswerAccounts Receivable - B. Shore CompanyAccounts Receivable-C. JuddAccounts Receivable-R. ElliotAllowance for Doubtful AccountsBad Debts ExpenseCashInterest IncomeInterest ReceivableNotes Receivable-B. Shore CompanyNotes Receivable-C. JuddNotes Receivable-R. Elliot Answer Answer
To accrue interest income on December 16 note.

Solutions

Expert Solution

Date Account title Debit credit
Jun 8 Notes Receivable- R. Elliot 19000
Accounts Receivable- R. Elliot 19000
Aug 7 cash 19253
Notes Receivable- R. Elliot 19000
Interest Income (19000*.08*60/360) 253
Sep 1 Notes Receivable - B. Shore Company 22000
Accounts Receivable - B. Shore Company 22000
Dec 16 Notes Receivable - C. Judd 18400
Accounts Receivable - C. Judd 18400
Dec 30 Accounts Receivable - B. Shore Company 22660
Interest income (22000*.09*120/360) 660
Notes Receivable - B. Shore Company 22000
Dec 31 Allowance for Doubtful Accounts 22660
Accounts Receivable - B. Shore Company 22660
Dec 31 Bad debt expense 41100
Allowance for Doubtful Accounts 41100
Dec 31 Interest Receivable` 77
Interest income 77

#

Adjusting entry for bad debt expense =Estimated desired balance in allowance account - unadjusted balance

= 18500-(-22600)

= 18500+22600

=41100

#Interest earned on C. Judd note for the period 17Dec- 31Dec 18400*10%*15/360=76.67(rounded to 77)

ekkarill92 answered 3 years ago
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