Question

CHAPTER 9 LAB 1. Prepare the journal entries to record the transactions and events of AC/DC on the "transactions" tab.  Use the "JE tab" to journalize the transactions.   2. Prepare a year-end adjusting journal entry as of December 31, 2018 for each separate situation (use the "AJE tab" to journalize the adjustment):     (a) Bad debts are estimated to be $16,800 by an analysis of the A/R aging.  The unadjusted balance in the allowance for doubtful accounts is a debit of $1,000.     (b) Bad debts are estimated to be 1% of its credit sales of $1,500,000.  The unadjusted balance in the allowance for doubtful accounts is a credit of $1,000.

2017 Nov 1 Accepted a $9,600, 90 day, 8% note in granting Sam Darnold a time extension on his past due account receivable.

Dec 31 Made an adjusting entry to record the accrued interest on the Darnold note.

2018 Jan 30 Received Darnold's payment for principle and interest on the note dated Nov 1.

Feb 28 Received $5,000 cash and accepted a $6,000, 60 day, 10% note from Leveon Bell in exchange for merchandise that sells for $11,000 (the cost of sale was $6,000).

Mar 1 Accepted an $8,000, 60 day, 15% note from Adam Gase in exchange for merchandise that sells for $8,000 (the cost of sale was $5,000).

Mar 5 Completed a $6,000 credit card sale with a 1% fee (the cost of sales was $3,200). The cash is transferred immediately from the credit card company)

Mar 30 Leveon Bell dishonored the $6,000 note.

Apr 30 Received Gase's payment for principle and interest on the note dated Mar 1.

May 1 Wrote-off a $2,500 account receivable arising from a sale to Woody Johnson that dates 10-months ago. AC/DC uses the allowance method.

May 31 Receives the full amount of $2,500 from Woody Johnson that was previously written off on May 1. Record the bad debts recovery.

Jun 21 Received a $15,000, 90 day, 10% note from Robbie Anderson in exchange for merchandise that sells for $15,000 (the cost of sale was $7,500).

Sep 19 Received Anderson's payment for principle and interest on the note dated June 21.

Oct 30 Completed a $4,000 credit card sale with a 2% fee (the cost of sales was $2,000). The cash is transferred immediately from the credit card company)

Nov 30 Wrote-off Bell's account against the allowance for doubtful accounts.

Answer 1

Notes