Recording Notes Receivable Discounted The following are events of the Singer Corporation for the current year:
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30 Jun |
Barney Manufacturing gives Singer a $5,000, 11%, 90 day note for merchandise purchased. |
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15 Jul |
Dillon Construction Co. gives Singer a $6,000, 10%, 60 day note for merchandise originally purchased on April 20 of the current year. |
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30 Jul |
The Barney and Dillon notes are discounted with recourse by Singer at its bank at 12%. |
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Sept. 15 |
The bank notifies Singer that the Dillon note was paid. |
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Sept. 30 |
The bank notifies Singer that Barney defaulted on the note and charges the amount of principal, interest, and a fee of $10 against Singer’s bank account. |
Required
Prepare journal entries to record the preceding information on Singer’s accounting records. (Assume that the company does not normally discount its notes.)