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Chapter 7: 8QS_2 (page 343)

On August 2, Jun Co. receives a \(6,000, 90-day, 12% note from customer Ryan Albany as payment on his \)6,000 account.

(2) Prepare Jun’s journal entry for August 2.

Short Answer

Expert verified

The notes receivables are the promissory notes issued by one party to another party that promises to pay a certain sum of money on its maturity date.

Step by step solution

01

Introduction

The journal entry for the issuance of the notes will be recorded on its issuance date with the amount of face value of the notes as payment.

02

Journal entry

Date

Particulars

Debit

Credit

August 2

Notes receivables- Jun Co.

$6,000

Accounts receivables- Ryan Albany

$6,000

(To record the issuance of note)

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Most popular questions from this chapter

At December 31, 2017, Hawke Company reports the following results for its calendar year.

Cash sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(1,905,000

Credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,682,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . \)1,270,100 debit

Allowance for doubtful accounts . . . . . . . . . . . . . 16,580 debit

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a

At December 31, 2017, Ingleton Company reports the following results for the year:

Cash sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(1,025,000

Credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,342,000

In addition, its unadjusted trial balance includes the following items:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . \)575,000 debit

Allowance for doubtful accounts . . . . . . . . . . . . . 7,500 credit

Required

1. Prepare the adjusting entry for Ingleton Co. to recognize bad debts under each of the following independent assumptions.

a. Bad debts are estimated to be 2.5% of credit sales.

b. Bad debts are estimated to be 1.5% of total sales.

c. An aging analysis estimates that 6% of year-end accounts receivable are uncollectible

At December 31, 2017, Hawke Company reports the following results for its calendar year.

Cash sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \(1,905,000

Credit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,682,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . \)1,270,100 debit

Allowance for doubtful accounts . . . . . . . . . . . . . 16,580 debit

1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.

a. Bad debts are estimated to be 1.5% of credit sales.

b. Bad debts are estimated to be 1% of total sales.

c. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system).

  1. Sold \(20,000 of merchandise, which cost \)15,000, on MasterCard credit cards. MasterCard charges a 5% fee.

The following data are taken from the comparative balance sheets of Ruggers Company. Compute and interpret its accounts receivable turnover for year 2017 (competitors average a turnover of 7.5).
See all solutions

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