Prepare the general journal entries for Infinity Diner for the following notes receivable transactions (assuming there are 28 days in February). When required, enter amounts to the nearest cent. If an amount box does not require an entry, leave it blank. Dec. 3 Sold merchandise to Brian Chan on account, $6,900. 11 Sold merchandise to Gloria Lupo on account, $3,600. Jan. 2 Received a $6,900, 10%, 30-day note from Brian Chan in payment of account. 10 Received a $3,600, 12%, 30-day note from Gloria Lupo in payment of account. Feb. 1 Received $600, plus interest on January 2 note, and a new, 14% 60-day note for the remaining balance. Feb. 9 On the maturity date, note dated January 10 was dishonored. Apr. 2 On the maturity date, Infinity Diner received principal and interest for February 1 note.
Bad Debts
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.
Prepare the general
When required, enter amounts to the nearest cent. If an amount box does not require an entry, leave it blank.
| Dec. 3 | Sold merchandise to Brian Chan on account, $6,900. |
| 11 | Sold merchandise to Gloria Lupo on account, $3,600. |
| Jan. 2 | Received a $6,900, 10%, 30-day note from Brian Chan in payment of account. |
| 10 | Received a $3,600, 12%, 30-day note from Gloria Lupo in payment of account. |
| Feb. 1 | Received $600, plus interest on January 2 note, and a new, 14% 60-day note for the remaining balance. |
| Feb. 9 | On the maturity date, note dated January 10 was dishonored. |
| Apr. 2 | On the maturity date, Infinity Diner received principal and interest for February 1 note. |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
