Journal Entries for Accounts and Notes Receivable Lancaster, Inc., began business on January 1. Certain transactions for the year follow:
Jun.8
Received a $17,000, 60 day, eight percent note on account from R. Elliot.
Aug.7
Received payment from R. Elliot on her note (principal plus interest).
Sep.1
Received a $20,000, 120 day, nine percent note from B. Shore Company on account.
Dec.16
Received a $16,400, 45 day, ten percent note from C. Judd on account.
Dec.30
B. Shore Company failed to pay its note.
Dec.31
Wrote off B. Shore’s account as uncollectible. Lancaster, Inc., uses the allowance method
of providing for credit losses.
Dec.31
Recorded expected credit losses for the year by an adjusting entry. Accounts written off
during this first year have created a debit balance in the Allowance for Doubtful Accounts of
$24,600. An analysis of aged receivables indicates that the desired balance of the
allowance account should be $21,500.
Dec.31
Made the appropriate adjusting entries for interest.
Required Record the foregoing transactions and adjustments in general journal form. (Use 360 days for all interest calculations. Round all Interest Income calculations to the nearest dollar.)
General Journal
Date
Description
Debit
Credit
Jun.8
$
$
Received a 60-day, 8 percent note on account.
Aug.7
$
$
Notes Receivable-R. Elliot
To record receipt of principal plus interest from R. Elliot.
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