Question

Sales and 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 merchandise 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 to Pioneer Co. for $17,700. The cost of merchandise 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.

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 merchandise 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.

Answer 1

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