CHP#8_3Journal Entries for Accounts and Notes Receivable Lance, Inc., began business on January 1. Several transactions for the year follow:May 2Received a $18,000, 60 day, ten percent note on account from the Holt Company.Jul.1Received payment from Holt for its note plus interest.Jul.1Received a $30,000, 120 day, ten percent note from B. Rich Company on account.Oct.29B. Rich failed to pay its note.Dec.9Wrote off B. Rich’s account as uncollectible. Lance, Inc., uses the allowance method of providing for credit losses.Dec.11Received a $35,000, 90 day, nine percent note from W. Maling on account.Dec.31Recorded expected credit losses for the year by an adjusting entry. The allowance for doubtful accounts has a debit balance of $28,300 as a result of accounts written off during this first year. An analysis of aged accounts receivables indicates that the desired balance of the allowance account is $5,800.Dec.31Made the appropriate adjusting entries for interest.RequiredRecord the foregoing transactions and adjustments in general journal form. (Round all Interest Income calculations to the nearest dollar.)

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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CHP#8_3

Journal Entries for Accounts and Notes Receivable

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

May 2	Received a $18,000, 60 day, ten percent note on account from the Holt Company.
Jul.1	Received payment from Holt for its note plus interest.
Jul.1	Received a $30,000, 120 day, ten percent note from B. Rich Company on account.
Oct.29	B. Rich failed to pay its note.
Dec.9	Wrote off B. Rich’s account as uncollectible. Lance, Inc., uses the allowance method of providing for credit losses.
Dec.11	Received a $35,000, 90 day, nine percent note from W. Maling on account.
Dec.31	Recorded expected credit losses for the year by an adjusting entry. The allowance for doubtful accounts has a debit balance of $28,300 as a result of accounts written off during this first year. An analysis of aged accounts receivables indicates that the desired balance of the allowance account is $5,800.
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.)

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