Question

Journal Entries for Accounts and Notes Receivable Lancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $18,000, 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 $21,000, 120 day, nine percent note from B. Shore Company on account. Dec.16 Received a $17,000, 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 $25,600. An analysis of aged receivables indicates that the desired balance of the allowance account should be $22,500. 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 Answer Answer 18,000 Answer 0 Answer Answer 0 Answer 18,000 Received a 60-day, 8 percent note on account. Aug.7 Answer Answer 18,240 Answer 0 Answer Answer 0 Answer 240 Notes Receivable-R. Elliot Answer 0 Answer 18,000 To record receipt of principal plus interest from R. Elliot. Sep.1 Answer Answer 21,000 Answer 0 Answer Answer 0 Answer 21,000 Received a 120-day, 9 percent note on account. Dec.16 Answer Answer 17,000 Answer 0 Answer Answer 0 Answer 17,000 Received a 45-day, 10 percent note on account. Dec.30 Answer Answer 21,630 Answer 0 Answer Answer 0 Answer 630 Notes Receivable-B. Shore Company Answer 0 Answer 21,000 To record dishonoring of B. Shore Company's note. Dec.31 Answer Answer 21,630 Answer 0 Answer Answer 0 Answer 21,630 To write off B. Shore's account. Dec.31 Answer Answer 48,100 Answer 0 Answer Answer 0 Answer 48,100 To record allowance for uncollectible accounts. Dec.31 Answer Answer 213 Answer 0 Answer Answer 0 Answer 213 To accrue interest income on December 16 note.

Answer 1