A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company’s unadjusted trial balance reported the following selected amounts:
Accounts receivable $ 361,000 debit
Allowance for uncollectible accounts 560 credit
Net sales 806,000 credit
All sales are made on credit. Based on past experience, the company estimates 0.4% of credit sales to be uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
On March 17, Grady Company agrees to accept a 60-day, 8%, $9,300 note from Alert Company to extend the due date on an overdue account. What is the journal entry needed to record the payment of the note by Alert Company on the maturity date?
Debit Notes Payable $9,300; debit Interest Expense $124; credit Cash $9,424.
Debit Cash $9,424; credit Interest Revenue $124; credit Notes Payable $9,300.
Debit Cash $9,424; credit Interest Revenue $124; credit Notes Receivable $9,300.
Debit Notes Payable $9,300; debit Interest Expense $186; credit Cash $9,486.
Debit Notes Payable $9,300; credit Interest Expense $124, credit Cash $9,176