Accounting for uncollectible accounts (aging of accounts method, card sales, notes receivable, and accrued interest revenue
Sleepy Recliner Chairs completed the following selected transactions:
2011
Jul 1 : Sold inventory to Go-Mart, receiving a $45,000, nine-month 12% note, Ignore cost of goods sold.
Oct 31: Recorded credit-and Debit-card sales for the period of 19,000.
Nov 3: Card processor drafted company’s checking account for processing fee of $420.
Dec 31: Made an adjusting entry to accrue interest on Go-Mart note 31: Made an Adjusting entry to record uncollectible account expense based on an aging of accounts receivable. The aging schedule shows that $14,100 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in allowance for uncollectible accounts is $10,200.
2012
Apr 1: Collected the Maturity Value of the Go- mart note.
June 23: Sold Merchandise to Appeal, Corp., receiving a 60-day, 12% note for $7,000.
Ignore cost of goods sold.
Aug 22: Appeal, Corp., dishonored its note (failed to pay) at maturity; we converted the maturity value of the note to an account receivable.
Nov 16 : Loaned $23,000 cash to Creed, Inc, receiving a 90-day, 16% note.
Dec 5 : Collected in full on account from Appeal, Corp s31: Accrued the interest on the Creek, Inc, note.
Requirement:
1. Record the transactions in the journal of Sleepy recliner Chairs. Explanations are not required. ( for notes stated in days, used a 360- day year. Round to the nearest dollar).