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Question: Sales and Notes Receivable Transactions The following were selected from among the transactions c...

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 goods 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, terms 1/10, n/30, to Pioneer Co. for $17,700. Record the sale net of the discount. The cost of goods 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, less 1% discount.
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 goods 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. Assume this is a year in which February has 28 days.

Jan. 21-sale

Jan. 21-cost

Mar. 18

May 17


June 15-sale

June 15-cost

June 21

June 25

July 21



Sept. 19- note


Sept. 22-sale

Sept. 22-cost

Oct. 14

Nov. 13


Dec. 28

Answer 1

SOLUTION

Date	Account titles and Explanation	Debit ($)	Credit ($)
Jan 21	Account Receivable- Black Tie Co	28,000
	Sales		28,000
	Cost of Merchandise Sold	16,800
	Merchandise Inventory		16,800
Mar.18	Note Receivable- Black Tie Co	28,000
	Account Receivable- Black Tie Co		28,000
May 17	Cash	28,280
	Interest Revenue ($28,000 * 6% * 60/360)		280
	Note Receivable - Black Tie Co		28,000
June 15	Account Receivable- Pioneer Co.	17,700
	Sales		17,700
	Cost of Merchandise Sold	10,600
	Merchandise Inventory		10,600
June 21	Note Receivable - JR Stutts	18,000
	Cash		18,000
June 25	Cash	17,523
	Sales discount ($17,700*1%)	177
	Account Receivable- Pioneer Co.		17,700
July 21	Note Receivable - JR Stutts	18,000
	Cash	120
	Interest Revenue ($18,000 * 8% * 30/360)		120
	Note Receivable - JR Stutts		18,000
Sept 19	Cash	18,270
	Interest Revenue ($18,000 * 9% * 60/360)		270
	Note Receivable - JR Stutts		18,000
Sept 22	Account Receivable- Wycoff Co	20,000
	Sales		20,000
	Cost of Merchandise Sold	12,000
	Merchandise Inventory		12,000
Oct 14	Note Receivable- Wycoff Co	20,000
	Account Receivable- Wycoff Co		20,000
Nov 13	Account Receivable- Wycoff Co	20,100
	Interest Revenue ($20,000*6%*30/360)		100
	Notes Receivable		20,000
Dec.28	Cash	20,301
	Account Receivable- Wycoff Co		20,100
	Interest Revenue ($20,100*8%*45/360)		201