Question

Sales and A customer's written promise to pay an amount and possibly interest at an agreed-upon rate.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., $28,000. The cost of goods sold was $16,800.
Mar. 18.		Accepted a 60-day, 6% note for $28,000 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, terms 1/10, n/30, to Pioneer Co. for $17,700. Record the sale net of the discount. The cost of goods sold was $10,600.
21.		Loaned $18,000 cash to JR Stutts, receiving a 30-day, 8% note.
25.		Received from Pioneer Co. the amount due on the invoice of June 15, less 1% discount.
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., $20,000. The cost of goods sold was $12,000.
Oct. 14.		Accepted a 30-day, 6% note for $20,000 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 45 days at 8% 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. Assume this is a year in which February has 28 days.

Answer 1

Date	Accounting titles & Explanations				Debit	Credit
21-Jan	Accounts receivable-Black tie co				28,000
	sales					28,000
	cost of goods sold				16,800
	Merchandise inventory					16,800
18-Mar	Note receivable				28,000
	Accounts receivable-Black tie co					28,000
17-May	Cash				28,280
	interest income (28000*6%*60/360)					280
	Note Receivable					28,000
15-Jun	Accounts receivable-Pioneer co				17,523
	Sales	(17700*99%)				17523
	cost of goods sold				10,600
	merchandises inventory					10,600
21-Jun	Note receivable -JR Stutts				18,000
	cash					18,000
25-Jun	Cash				17,523
	Accounts receivable					17,523
21-Jul	9% note receivable				18,000
	cash				120
	interest income		(18000*8%*30/360)			120
	8% note receivable					18,000
19-Sep	cash				18,270
	interest income		(18000*9%*60/360)			270
	9% note receivable					18,000
22-Sep	Accounts receivable				20,000
	sales					20,000
	cost of goods sold				12,000
	Merchandise inventory					12,000
14-Oct	Note receivable				20,000
	accounts receivable					20,000
13-Nov	Account receivable				20,100
	interest income					100
	note receivable(20000*6%*30/360)					20,000
28-Dec	Cash				20,301
	interest income		(20100*8%*45/360)			201
	Account receivable					20,100