Apr. 28 Performed service on account for Beach Club, $25,000. Received a $25,000, 60-day, 12% note from Beach Club in satisfaction of its past-due account receivable. Sep. 1 Oct. 31 Collected the Beach Club note at maturity.

Apr. 28 Performed service on account for Beach Club, $25,000. Received a $25,000, 60-day, 12% note from Beach Club in satisfaction of its past-due account receivable. Sep. 1 Oct. 31 Collected the Beach Club note at maturity.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 2CE

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Like New Steam Cleaning performs services on account. When a customer account becomes four months old, Like New converts the account to a note receivable. During 2018,the company completed the following transactions:

Record the transactions in

Like New's

journal. Round to the nearest dollar. (Use a

365-day

year for computations. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Apr. 28
Performed service on account for Beach Club, $25,000.
Received a $25,000, 60-day, 12% note from Beach Club in
satisfaction of its past-due account receivable.
Sep. 1
Oct. 31
Collected the Beach Club note at maturity.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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