Accounting for uncollectible accounts (aging of accounts method),card sales, notes receivable, and accrued interest revenue Relaxing Recliner Chairs completed the following selected transactions:
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2011 |
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Jul 1 |
Sold inventory to Great – Mart, receiving a $45,000, nine month, 12% note. Ignore cost of goods sold. |
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Oct 31 |
Recorded credit and debit card sales for the period of $21,000. |
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Nov 3 |
Card processor drafted company’s checking account for processing fee of $410. |
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Dec 31 |
Made an adjusting entry to accrue interest on the Great – Mart note. |
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31 |
Made an adjusting entry to record uncollectible account expense based on an aging of accounts receivable. The aging schedule shows that $15,200 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for uncollectible accounts is $11,600. |
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2012 |
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Apr 1 |
Collected the maturity value of the Great – Mart note. |
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Jun 23 |
Sold merchandise to Ambiance, Corp., receiving a 60 day, 9% |
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note for $13,000. Ignore cost of goods sold. |
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Aug 22 |
Ambiance, Corp., dishonored its note (failed to pay) at maturity; |
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we converted the maturity value of the note to an account receivable. |
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Nov 16 |
Loaned $21,000 cash to Creed, Inc., receiving a 90 day, 8% note. |
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Dec 5 |
Collected in full on account from Ambiance, Corp. |
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31 |
Accrued the interest on the Creed, Inc., note. |
Requirement
1. Record the transactions in the journal of Relaxing Recliner Chairs. Explanations are not required. (For notes stated in days, use a 360 day year. Round to the nearest dollar.)