Question
In: Accounting
Richard Jackson and Melissa Aaron own and operate the Midwest Office Supply store. The following transactions...
Richard Jackson and Melissa Aaron own and operate the Midwest Office Supply store. The following transactions involving notes and interest were completed during the last three months of 2019:
October
3.Received a $8,886, 7 1/2%, 30-day note from Hansen Appliance in payment for
sale of merchandise.
7.Received a $12,000, 9%, 45-day note from Jefferson Book Company in payment
of an account receivable
9.Received a $12,775, 10%, 60-day note from Josh Martinez in payment for sale
of merchandise
11. Issued a 40-day, S12,400, 8% note to Lincoln Paper Products in payment of an account payable
14. Issued a 30-day, $12,000, 7 A% note to Akron Paper in payment of a purchase of account of merchandise
20. Discounted the October 9 note receivable at First Federal Bank at 14%.
November
2.Received principal and interest from Hansen Appliance in full payment of
October 3 note receivable.
13. Paid principal and interest to Akron Paper in full payment of October 14 note payable
20. Paid $6,000, plus interest to Lincoln Paper Products (see October 11); and Issued a new, 6400, 11%, 30-day note payable
21. Received $4,000, plus interest from Jefferson Book Company (see October ) and received a new, 8,000, 30-day, 10% note receivable.
24. Received a $11,000, 7 1/4%, 30-day note receivable from Michelle Davis in payment for for sale of merchandise
30. Discounted the November 24 note at First Federal Bank at 14%
December
6.Issued a $20,000, 8%, 90-day note to Apple Valley Supply in payment for a purchase of merchandise.
10.Received a $13,330, 8%, 90-day note from Ellis Furniture in payment for a sale
of merchandise.
20. Paid principal and interest to Lincoln Paper Products (see November 20) in full
payment of note payable.
21.Received principal and interest from Jefferson Book Company (see
November 21) in full payment of note receivable.
24.Michelle Davis dishonored the November 24 note. The bank bills Midwest
Office Supply for the maturity value of the note plus a $56 bank fee.
31.Michelle Davis' dishonored note is collected. She pays Midwest Office Supply
the maturity value of the note, the $56 bank fee, and interest at 11% on the
maturity value plus the bank fee
31. Prepared the necessary adjusting entry for notes receivable outstanding
31. Prepared the necessary adjusting entry for notes payable outstanding
Solutions
Expert Solution
Recording of all entries to determine the Notes Receivable and Notes Payable adjustment entries on 31 Dec
| Date | Particulars | Dr | Cr | Party |
| 3-Oct | 7.5% Note Receivable | 8886 | Hansen | |
| 3-Oct | Sales | 8886 | Hansen | |
| 7-Oct | 9% Note Receivable | 12000 | Jefferson | |
| 7-Oct | Account Receivable | 12000 | Jefferson | |
| 9-Oct | 10% Note Receivable | 12775 | Josh | |
| 9-Oct | Sales | 12775 | Josh | |
| 11-Oct | Accounts Payable | 12400 | Lincoln | |
| 11-Oct | 8% Note Payable | 12400 | Lincoln | |
| 14-Oct | Purchases | 12000 | Akron | |
| 14-Oct | 7% Note Payable | 12000 | Akron | |
| 20-Oct | Cash | 12775 | First Federal | |
| 20-Oct | 14% Note Payable | 12775 | First Federal | |
| 2-Nov | Cash | 8,941.54 | Hansen | |
| 2-Nov | Interest Income | 55.54 | Hansen | |
| 2-Nov | 7.5% Note Receivable | 8886 | Hansen | |
| 13-Nov | 7% Note Payable | 12000 | Akron | |
| 13-Nov | Interest Paid | 70 | Akron | |
| 13-Nov | Cash | 12070 | Akron | |
| 20-Nov | 8% Note Payable | 12400 | Lincoln | |
| 20-Nov | Interest | 110.22 | Lincoln | |
| 20-Nov | Cash | 6,110.22 | Lincoln | |
| 20-Nov | 11% Note Payable | 6400 | Lincoln | |
| 21-Nov | 10% Note Receivable | 8000 | Jefferson | |
| 21-Nov | Cash | 4135 | Jefferson | |
| 21-Nov | 9% Note Receivable | 12000 | Jefferson | |
| 21-Nov | Interest Income | 135 | Jefferson | |
| 24-Nov | 7.25% Note Receivable | 11000 | Michelle | |
| 24-Nov | Sales | 11000 | Michelle | |
| 30-Nov | Cash | 11000 | First Federal | |
| 30-Nov | 14% Note Payable | 11000 | First Federal | |
| 6-Dec | Purchases | 20000 | Apple | |
| 6-Dec | 8% Note Payable | 20000 | Apple | |
| 10-Dec | 8% Note Receivable | 13330 | Ellis | |
| 10-Dec | Sales | 13330 | Ellis | |
| 20-Dec | 11% Note Payable | 6400 | Lincoln | |
| 20-Dec | Interest | 58.67 | Lincoln | |
| 20-Dec | Cash | 6,458.67 | Lincoln | |
| 21-Dec | Cash | 8066.666667 | Jefferson | |
| 21-Dec | 10% Note Receivable | 8000 | Jefferson | |
| 21-Dec | Interest Income | 66.67 | Jefferson | |
| 24-Dec | 14% Note Payable | 11000 | First Federal | |
| 24-Dec | Interest Paid | 106.9444444 | First Federal | |
| 24-Dec | Bank Fee | 56 | First Federal | |
| 24-Dec | Cash | 11162.94444 | First Federal | |
| 31-Dec | Cash | 11,161 | Michelle | |
| 31-Dec | Interest Income | 82 | Michelle | |
| 31-Dec | Interest Income (Penal Interest @11%) | 24 | Michelle | |
| 31-Dec | Bank Fee | 56 | Michelle | |
| 31-Dec | 7.25% Note Receivable | 11,000 | Michelle | |
| Adjusting Entries for Notes Receivable | ||||
| 31-Dec | Accounts Receivable | 12987.91667 | Josh | |
| 10% Note Receivable | 12775 | Josh | ||
| Interest Income | 212.9166667 | Josh | ||
| (Entry to transfer Note Recivable issued to Josh Martinez as Accounts Receivable) | ||||
| Adjusting Entries for Notes Payable | ||||
| 31-Dec | 14% Note Payable | 12775 | Federal | |
| Interest Paid |
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non-bank credit cards used by its customers.
Record on page 10 of the journal
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non-bank credit cards used by its customers.
Record on page 10 of the journal
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