Problem 8-6A On January 1, 201
Problem 8-6A
On January 1, 2017, Novak Corp. had Accounts Receivable of$54,300 and Allowance for Doubtful Accounts of $3,700. Novak Corp.prepares financial statements annually. During the year, thefollowing selected transactions occurred:
Jan. 5 | Sold $3,600 of merchandise to Rian Company, terms n/30. | |
Feb. 2 | Accepted a $3,600, 4-month, 9% promissory note from RianCompany for balance due. | |
12 | Sold $10,800 of merchandise to Cato Company and accepted Cato’s$10,800, 2-month, 10% note for the balance due. | |
26 | Sold $12,200 of merchandise to Malcolm Co., terms n/10. | |
Apr. 5 | Accepted a $12,200, 3-month, 9% note from Malcolm Co. forbalance due. | |
12 | Collected Cato Company note in full. | |
June 2 | Collected Rian Company note in full. | |
15 | Sold $2,000 of merchandise to Gerri Inc. and accepted a $2,000,6-month, 13% note for the amount due. |
Journalize the transactions. (Omit cost of goods sold entries.)(Credit account titles are automatically indented whenamount is entered. Do not indent manually. Record journal entriesin the order presented in the problem.)
Answer:
Journal entries :
Date | account and explanation | debit | credit |
Jan 5 | Account receivable- Rian Company | 3600 | |
Sales revenue | 3600 | ||
(To record sales) | |||
Feb 2 | Notes receivable- Rian Company | 3600 | |
Account receivable- Rian Company | 3600 | ||
(To record notes) | |||
Feb 12 | Account receivable-Cato’s | 10800 | |
Sales revenue | 10800 | ||
(To record sales) | |||
Feb 26 | Account receivable-Malcolm Co | 12200 | |
Sales revenue | 12200 | ||
(To record sales) | |||
Apr 5 | Notes receivable-Matcolm Co | 12200 | |
Account receivable-Malcolm Co | 12200 | ||
(To record notes) | |||
June 12 | Cash | 10980 | |
Notes receivable-Cato’s company | 10800 | ||
Interest revenue (10800*12%*2/12) | 180 | ||
(To record amount collected) | |||
June 12 | Cash | 3708 | |
Notes receivable-Rian Co | 3600 | ||
Interest revenue (3600*9%*4/12) | 108 | ||
(TO record collection) | |||
JUne 15 | Notes receivable-Gerri Inc. | 2000 | |
Sales revenue | 2000 | ||
(To record sales) | |||