Journal Entries for Accounts and Notes ReceivableLancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $18,000, 60 day, eight percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received a $21,000, 120 day, nine percent note from B. Shore Company on account. Dec.16 Received a $17,000, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc., uses the allowance method of providing for credit losses. 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 $25,600. An analysis of aged receivables indicates that the desired balance of the allowance account should be $22,500. Dec.31 Made the appropriate adjusting entries for interest.
Journal Entries for Accounts and Notes ReceivableLancaster, Inc., began business on January 1. Certain transactions for the year follow: Jun.8 Received a $18,000, 60 day, eight percent note on account from R. Elliot. Aug.7 Received payment from R. Elliot on her note (principal plus interest). Sep.1 Received a $21,000, 120 day, nine percent note from B. Shore Company on account. Dec.16 Received a $17,000, 45 day, ten percent note from C. Judd on account. Dec.30 B. Shore Company failed to pay its note. Dec.31 Wrote off B. Shore's account as uncollectible. Lancaster, Inc., uses the allowance method of providing for credit losses. 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 $25,600. An analysis of aged receivables indicates that the desired balance of the allowance account should be $22,500. Dec.31 Made the appropriate adjusting entries for interest.
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter18: Acquiring Capital For Growth And Development
Section: Chapter Questions
Problem 2AP
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Lancaster, Inc., began business on January 1. Certain transactions for the year follow:
Jun.8 | Received a $18,000, 60 day, eight percent note on account from R. Elliot. |
Aug.7 | Received payment from R. Elliot on her note (principal plus interest). |
Sep.1 | Received a $21,000, 120 day, nine percent note from B. Shore Company on account. |
Dec.16 | Received a $17,000, 45 day, ten percent note from C. Judd on account. |
Dec.30 | B. Shore Company failed to pay its note. |
Dec.31 | Wrote off B. Shore's account as uncollectible. Lancaster, Inc., uses the allowance method |
of providing for credit losses. | |
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 | |
$25,600. An analysis of aged receivables indicates that the desired balance of the | |
allowance account should be $22,500. | |
Dec.31 | Made the appropriate |
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