Martinez Corp.’s balance sheet at December 31, 2016, included the following. Note receivable $640,000 Interest receivable...

Martinez Corp.’s balance sheet at December 31, 2016, included the following.

Note receivable		$640,000
Interest receivable		32,000
Accounts receivable	1,410,000
Less: Allowance for doubtful accounts receivable	86,000	1,324,000
		$1,996,000

The following occurred in 2017.

1.		Martinez made sales of $10,560,000. All sales were credit sales. Martinez allows some discounts for early payment of receivables and uses the gross method to record sales.
2.		Customer accounts of $85,250 were written off during the year.
3.		Accounts receivable of $10,660,000 were collected. Collections for the year included $300,000 of accounts on which 2% sales discounts were allowed.
4.		$14,000 was received in payment of an account which was written off the books as worthless in 2016.
5.		At year-end (December 31, 2017), Martinez estimated that its Allowance for Doubtful Accounts needed a balance of $76,000. This estimate is based on an analysis of aged accounts receivable.
6.		The note receivable and related interest were due January 1, 2017. Young collected both, in full, on that date.

Prepare all journal entries necessary to reflect the transactions above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Expert Solution

		Debit	Credit
1	Accounts Receivable	10,560,000.00
	Sales Revenue		10,560,000.00

2	Allowance for Doubtful Accounts	85,250.00
	Accounts Receivable		85,250.00

3	Cash	10,654,000.00
	Sales Discounts	6,000.00
	Accounts Receivable		10,660,000.00

4	Accounts Receivable	14,000.00
	Allowance for Doubtful Accounts		14,000.00

5	Bad Debt Expense	62,750.00
	Allowance for Doubtful Accounts		62,750.00

6	Cash	960,000.00
	Note receivable		640,000.00
	Interest receivable		320,000.00

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