Journal Entries for Accounts and Notes Receivable Armstrong, Inc., began business on January 1. Several transactions for the year follow:
May 2
Received a $18,800, 60 day, ten percent note on account from the Holt Company.
Jul.1
Received payment from Holt for its note plus interest.
Jul.1
Received a $31,000, 120 day, ten percent note from B. Rich Company on account.
Oct.30
B. Rich failed to pay its note.
Dec.9
Wrote off B. Rich’s account as uncollectible. Armstrong, Inc., uses the allowance method
of providing for credit losses.
Dec.11
Received a $25,000, 90 day, nine percent note from W. Maling on account.
Dec.31
Recorded expected credit losses for the year by an adjusting entry. The allowance for
doubtful accounts has a debit balance of $32,300 as a result of accounts written off during
this first year. An analysis of aged accounts receivables indicates that the desired balance
of the allowance account is $9,800
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
May 2
$
$
Received a 60-day, 10 percent note in payment of account.
Jul.1
$
$
Notes Receivable-Holt Company
To record collection of principal and interest from Holt Company.
Jul.1
$
$
Received a 120-day, 10 percent note in payment of account.
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