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P8-29A
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Req. 1
DEBIT
CREDIT
Journal
DATE
ACCOUNTS AND EXPLANATIONS
Oct 31
31
P8-29A
Accounting for uncollectible accounts (aging of accounts method), card sales, notes receivable, and accrued interest revenue
LO 2, 4, 5 [20-30 minutes]
Relaxing Recliner Chairs completed the following selected transactions:
Sold inventory to Great – Mart, receiving a $45,000,
nine-month, 12% note. Ignore cost of goods sold.
Recorded credit- and debit-card sales for the period of $21,000.
Card processor drafted company’s checking account for
processing fee of $410.
Made an adjusting entry to accrue interest on the
Great – Mart note.
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.
Jul 1
Nov 3
Dec 31
Collected the maturity value of the Great – Mart note.
Sold merchandise to Ambiance, Corp., receiving a 60-day, 9%
note for $13,000. Ignore cost of goods sold.
Ambiance, Corp., dishonored its note (failed to pay) at maturity;
we converted the maturity value of the note to an account
receivable.
Loaned $21,000 cash to Creed, Inc., receiving a 90-day,
8% note.
Collected in full on account from Ambiance, Corp.
Accrued the interest on the Creed, Inc., note.
Apr 1
Jun 23
Aug 22
Nov 16
Dec 5
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.)
Interest revenue ($45,000 X .12 X 3/12)
Accounting, 9e
Jennie April 23
2011.00
31.00
2012.00
31.00
2011.00
2012.00
1350.00
45000.00
0.12
0.25
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