Current Attempt in Progress Presented below is information related to Waterway Corp. August 1 5 9 Sep. 29 Waterway Corp. sold to Wildhorse Co. merchandise having a sales price of $20,600 with terms 1/10, net/60. Waterway records its sales and receivables net. Accounts receivable of $56,600 (gross) are factored with Easy Credit Corp. with recourse at a financing charge of 5%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.) Specific accounts receivable of $27,600 (gross) are pledged to Second Credit Corp. as security for a loan of $22,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.) Wildhorse Co. notifies Waterway that it is bankrupt and will pay only 20% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable when the discount period passed.) Prepare all necessary entries in general journal form for Waterway Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
Current Attempt in Progress Presented below is information related to Waterway Corp. August 1 5 9 Sep. 29 Waterway Corp. sold to Wildhorse Co. merchandise having a sales price of $20,600 with terms 1/10, net/60. Waterway records its sales and receivables net. Accounts receivable of $56,600 (gross) are factored with Easy Credit Corp. with recourse at a financing charge of 5%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.) Specific accounts receivable of $27,600 (gross) are pledged to Second Credit Corp. as security for a loan of $22,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.) Wildhorse Co. notifies Waterway that it is bankrupt and will pay only 20% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable when the discount period passed.) Prepare all necessary entries in general journal form for Waterway Corp. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Current Attempt in Progress
Presented below is information related to Waterway Corp.
August 1
5
9
Sep. 29
Waterway Corp. sold to Wildhorse Co. merchandise having a sales price of $20,600 with terms 1/10, net/60.
Waterway records its sales and receivables net.
Accounts receivable of $56,600 (gross) are factored with Easy Credit Corp. with recourse at a financing charge of 5%.
Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the
discount period.)
Specific accounts receivable of $27,600 (gross) are pledged to Second Credit Corp. as security for a loan of $22,000 at
a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts
receivable are past the discount period.)
Wildhorse Co. notifies Waterway that it is bankrupt and will pay only 20% of its account. Give the entry to write off the
uncollectible balance using the allowance method. (Note: First record the increase in the receivable when the discount
period passed.)
Prepare all necessary entries in general journal form for Waterway Corp. (Credit account titles are automatically indented when the
amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all
debit entries before credit entries. Record journal entries in the order presented in the problem.)
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