ollowing are transactions of the Wipe-Out Company: Mar. 2 Accepted an $11,140, 5%, 90-day note dated this day in granting a time extension on the past-due account of JNC Company. Apr. 21 Discounted, with recourse, the JNC Company note at BancFirst at a cost of $50. June 2 Received notice from BancFirst that JNC Company defaulted on the note due May 31. Paid the bank the principal plus interest due on the note. (Hint: Create an account receivable for the maturity value of the note.) July 16 Received payment from JNC Company for the maturity value of its dishonored note plus interest for 45 days beyond maturity at 5%. Sept. 3 Accepted a $4,940, 60-day, 5% note dated this day in granting Cecile Duval a time extension on her past-due account. 18 Discounted, without recourse, the Duval note at BancFirst at a cost of $25. Required: Prepare entries to record the above transactions. (Use 365 days in a year. Do not round intermediate calculations. Round the final answers to 2 decimal places.) Calculate: Record the payment received from JNC Company. Record acceptance of a 5%, 60-day note. Record the discounting of the Duval note.
ollowing are transactions of the Wipe-Out Company: Mar. 2 Accepted an $11,140, 5%, 90-day note dated this day in granting a time extension on the past-due account of JNC Company. Apr. 21 Discounted, with recourse, the JNC Company note at BancFirst at a cost of $50. June 2 Received notice from BancFirst that JNC Company defaulted on the note due May 31. Paid the bank the principal plus interest due on the note. (Hint: Create an account receivable for the maturity value of the note.) July 16 Received payment from JNC Company for the maturity value of its dishonored note plus interest for 45 days beyond maturity at 5%. Sept. 3 Accepted a $4,940, 60-day, 5% note dated this day in granting Cecile Duval a time extension on her past-due account. 18 Discounted, without recourse, the Duval note at BancFirst at a cost of $25. Required: Prepare entries to record the above transactions. (Use 365 days in a year. Do not round intermediate calculations. Round the final answers to 2 decimal places.) Calculate: Record the payment received from JNC Company. Record acceptance of a 5%, 60-day note. Record the discounting of the Duval note.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Following are transactions of the Wipe-Out Company:
| Mar. | 2 | Accepted an $11,140, 5%, 90-day note dated this day in granting a time extension on the past-due account of JNC Company. |
| Apr. | 21 | Discounted, with recourse, the JNC Company note at BancFirst at a cost of $50. |
| June | 2 | Received notice from BancFirst that JNC Company defaulted on the note due May 31. Paid the bank the principal plus interest due on the note. (Hint: Create an |
| July | 16 | Received payment from JNC Company for the maturity value of its dishonored note plus interest for 45 days beyond maturity at 5%. |
| Sept. | 3 | Accepted a $4,940, 60-day, 5% note dated this day in granting Cecile Duval a time extension on her past-due account. |
| 18 | Discounted, without recourse, the Duval note at BancFirst at a cost of $25. |
Required:
Prepare entries to record the above transactions. (Use 365 days in a year. Do not round intermediate calculations. Round the final answers to 2 decimal places.)
Calculate:
-
Record the payment received from JNC Company.
- Record acceptance of a 5%, 60-day note.
-
Record the discounting of the Duval note.
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