On January 1, 2011, Furball Company had Accounts Receivable $98,000 and Allowance for Doubtful Accounts $8,100. Furball Company prepares financial statements annually. During the year the following selected transactions occurred.
Jan. 5 Sold $10,800 of merchandise to Kandle Company, terms n/30.
Feb. 2 Accepted a $10,800, 4 month, 10% promissory note from Kandle Company for the balance due. 12 Sold $13,500 of merchandise to Lowe Company and accepted Lowe’s $13,500, 2 month, 10% note for the balance due. 26 Sold $7,000 of merchandise to Barrel Co., terms n/10.
Apr. 5 Accepted a $7,000, 3 month, 8% note from Barrel Co. for the balance due. 12 Collected Lowe Company note in full.
June 2 Collected Kandle Company note in full.
July 5 Barrel Co. dishonors its note of April 5. It is expected that Barrel will eventually pay the amount owed. 15 Sold $12,000 of merchandise to Bushel Co. and accepted Bushel’s $12,000, 3 month, 12% note for the amount due. Oct. 15 Bushel Co.’s note was dishonored. Bushel Co. is bankrupt, and there is no hope of future settlement. Instructions Journalize the transactions.