Austin, Inc., began business on January 1. Several transactions for the year follow: May 2 Received a $30,000, 60 day, ten percent note on account from the Haskins Company. Jul.1 Received payment from Haskins for its note plus interest. Jul.1 Received a $61,000, 120 day, nine percent note from R. Longo Company on account. Oct.29 R. Longo failed to pay its note. Dec.9 Wrote off R. Longo’s account as uncollectible. Austin, Inc., uses the allowance method of providing for credit losses. Dec.11 Received a $42,000, 90 day, 12 percent note from R. Canal on account. 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 $61,000. An analysis of aged accounts receivables indicates that the desired balance of the allowance account should be $13,200. Dec.31 Made the appropriate adjusting entries for interest. Required Record the foregoing transactions and adjustments in general journal form. (Round all Interest Income calculations to the nearest dollar.) General Journal Date Description Debit Credit May 2 Answer Answer Answer Answer Received a, 60-day, 10 percent note in payment of account. Jul.1 Answer Answer Answer Answer Notes Receivable-Haskins Company Answer Answer To record collection of principal and interest from Haskins Company. Jul.1 Answer Answer Answer Answer Received a 120-day, 9 percent note in payment of account. Oct.29 Answer Answer Answer Answer Notes Receivable-R. Longo Company Answer Answer To record dishonoring of note by R. Longo Company. Dec.9 Answer Answer Answer Answer Wrote off R. Longo's account. Dec.11 Answer Answer Answer Answer Received a 90-day, 12 percent note on account. Dec.31 Answer Answer Answer Answer To record allowance for doubtful accounts. Dec.31 Answer Answer Answer Answer To accrue interest income on December 11 note.

Austin, Inc., began business on January 1. Several transactions for the year follow: May 2 Received a $30,000, 60 day, ten percent note on account from the Haskins Company. Jul.1 Received payment from Haskins for its note plus interest. Jul.1 Received a $61,000, 120 day, nine percent note from R. Longo Company on account. Oct.29 R. Longo failed to pay its note. Dec.9 Wrote off R. Longo’s account as uncollectible. Austin, Inc., uses the allowance method of providing for credit losses. Dec.11 Received a $42,000, 90 day, 12 percent note from R. Canal on account. 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 $61,000. An analysis of aged accounts receivables indicates that the desired balance of the allowance account should be $13,200. Dec.31 Made the appropriate adjusting entries for interest. Required Record the foregoing transactions and adjustments in general journal form. (Round all Interest Income calculations to the nearest dollar.) General Journal Date Description Debit Credit May 2 Answer Answer Answer Answer Received a, 60-day, 10 percent note in payment of account. Jul.1 Answer Answer Answer Answer Notes Receivable-Haskins Company Answer Answer To record collection of principal and interest from Haskins Company. Jul.1 Answer Answer Answer Answer Received a 120-day, 9 percent note in payment of account. Oct.29 Answer Answer Answer Answer Notes Receivable-R. Longo Company Answer Answer To record dishonoring of note by R. Longo Company. Dec.9 Answer Answer Answer Answer Wrote off R. Longo's account. Dec.11 Answer Answer Answer Answer Received a 90-day, 12 percent note on account. Dec.31 Answer Answer Answer Answer To record allowance for doubtful accounts. Dec.31 Answer Answer Answer Answer To accrue interest income on December 11 note.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Austin, Inc., began business on January 1. Several transactions for the year follow:

May 2	Received a $30,000, 60 day, ten percent note on account from the Haskins Company.
Jul.1	Received payment from Haskins for its note plus interest.
Jul.1	Received a $61,000, 120 day, nine percent note from R. Longo Company on account.
Oct.29	R. Longo failed to pay its note.
Dec.9	Wrote off R. Longo’s account as uncollectible. Austin, Inc., uses the allowance method of providing for credit losses.
Dec.11	Received a $42,000, 90 day, 12 percent note from R. Canal on account.
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 $61,000. An analysis of aged accounts receivables indicates that the desired balance of the allowance account should be $13,200.
Dec.31	Made the appropriate adjusting entries for interest.

Required
Record the foregoing transactions and adjustments in general journal form. (Round all Interest Income calculations to the nearest dollar.)

General Journal
Date	Description	Debit	Credit
May 2		Answer	Answer
		Answer	Answer
	Received a, 60-day, 10 percent note in payment of account.
Jul.1		Answer	Answer
		Answer	Answer
	Notes Receivable-Haskins Company	Answer	Answer
	To record collection of principal and interest from Haskins Company.
Jul.1		Answer	Answer
		Answer	Answer
	Received a 120-day, 9 percent note in payment of account.
Oct.29		Answer	Answer
		Answer	Answer
	Notes Receivable-R. Longo Company	Answer	Answer
	To record dishonoring of note by R. Longo Company.
Dec.9		Answer	Answer
		Answer	Answer
	Wrote off R. Longo's account.
Dec.11		Answer	Answer
		Answer	Answer
	Received a 90-day, 12 percent note on account.
Dec.31		Answer	Answer
		Answer	Answer
	To record allowance for doubtful accounts.
Dec.31		Answer	Answer
		Answer	Answer
	To accrue interest income on December 11 note.

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