2018 Jul. 1 Sold merchandise inventory to Stan-Mart, receiving a $41,000, nine-month, 8% note. Ignore Cost of Goods Sold. Oct. 31 Recorded cash sales for the period of $24,000. Ignore Cost of Goods Sold. Dec. 31 Made an adjusting entry to accrue interest on the Stan-Mart note. 31 Made an adjusting entry to record bad debts expense based on an aging of accounts receivable. The aging schedule shows that $13,800 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts is $11,800. 2019 Apr. 1 Collected the maturity value of the Stan-Mart note. Jun. 23 Sold merchandise inventory to Appeal, Corp., receiving a 60-day, 6% note for $7,000. Ignore Cost of Goods Sold. Aug. 22 Appeal, Corp. dishonored its note at maturity; the business converted the maturity value of the note to an account receivable. Nov. 16 Loaned $17,000 cash to Crosby, Inc., receiving a 90-day, 16% note. Dec. 5 Collected in full on account from Appeal, Corp. 31 Accrued the interest on the Crosby, Inc. note.
2018 Jul. 1 Sold merchandise inventory to Stan-Mart, receiving a $41,000, nine-month, 8% note. Ignore Cost of Goods Sold. Oct. 31 Recorded cash sales for the period of $24,000. Ignore Cost of Goods Sold. Dec. 31 Made an adjusting entry to accrue interest on the Stan-Mart note. 31 Made an adjusting entry to record bad debts expense based on an aging of accounts receivable. The aging schedule shows that $13,800 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts is $11,800. 2019 Apr. 1 Collected the maturity value of the Stan-Mart note. Jun. 23 Sold merchandise inventory to Appeal, Corp., receiving a 60-day, 6% note for $7,000. Ignore Cost of Goods Sold. Aug. 22 Appeal, Corp. dishonored its note at maturity; the business converted the maturity value of the note to an account receivable. Nov. 16 Loaned $17,000 cash to Crosby, Inc., receiving a 90-day, 16% note. Dec. 5 Collected in full on account from Appeal, Corp. 31 Accrued the interest on the Crosby, Inc. note.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
Accounting for uncollectible accounts (aging-of-receivables method), notes receivable, and accrued interest revenue
Sleepy Recliner Chairs completed the following selected transactions:
Record the transactions in the journal of Sleepy Recliner Chairs. Explanations are not required. (Round to the nearest dollar.)
Transcribed Image Text:2018
Jul. 1 Sold merchandise inventory to Stan-Mart, receiving a $41,000, nine-month, 8%
note. Ignore Cost of Goods Sold.
Oct. 31 Recorded cash sales for the period of $24,000. Ignore Cost of Goods Sold.
Dec. 31 Made an adjusting entry to accrue interest on the Stan-Mart note.
31 Made an adjusting entry to record bad debts expense based on an aging
of accounts receivable. The aging schedule shows that $13,800 of accounts
receivable will not be collected. Prior to this adjustment, the credit balance in
Allowance for Bad Debts is $11,800.
2019
Apr. 1 Collected the maturity value of the Stan-Mart note.
Jun. 23 Sold merchandise inventory to Appeal, Corp., receiving a 60-day, 6% note for
$7,000. Ignore Cost of Goods Sold.
Aug. 22 Appeal, Corp. dishonored its note at maturity; the business converted the
maturity value of the note to an account receivable.
Nov. 16 Loaned $17,000 cash to Crosby, Inc., receiving a 90-day, 16% note.
Dec. 5 Collected in full on account from Appeal, Corp.
31 Accrued the interest on the Crosby, Inc. note.
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