Record journal entries for the following transactions of Piano Wholesalers. Jan. 1, 2018 Issued a $1,241,650 note to customer Arrowstar as terms of a merchandise sale. The merchandise’s cost to Piano Wholesalers is $608,000. Note contract terms included a 24-month maturity date and a 3.4% annual interest rate. Dec. 31, 2018 Piano Wholesalers records interest accumulated for 2018. Dec. 31, 2019 Piano Wholesalers converts Arrowstar’s dishonored note into account receivable. This includes accumulated interest for the 24-month period. April 12, 2020 Piano Wholesalers sells the outstanding debt from Arrowstar to a collection agency at 40% of the accounts receivable value. Jan. 1, 2018 Notes Receivable: Arrowstar fill in the blank 2 fill in the blank 3 Sales Revenue fill in the blank 5 fill in the blank 6 To record sale in exchange for Notes Receivable: Arrowstar Jan. 1, 2018 Cost of Goods Sold fill in the blank 8 fill in the blank 9 Merchandise Inventory fill in the blank 11 fill in the blank 12 To record the cost of sale Dec. 31, 2018 Interest Receivable: Arrowstar fill in the blank 14 fill in the blank 15 Interest Revenue fill in the blank 17 fill in the blank 18 To record interest accumulated in 2018 Dec. 31, 2019 Accounts Receivable: Arrowstar fill in the blank 20 fill in the blank 21 Notes Receivable: Arrowstar fill in the blank 23 fill in the blank 24 Interest Receivable: Arrowstar fill in the blank 26 fill in the blank 27 Interest Revenue fill in the blank 29 fill in the blank 30 To record conversion of note to Accounts Receivable, dishonored note April 12, 2020 Cash fill in the blank 32 fill in the blank 33 Factoring Expense fill in the blank 35 fill in the blank 36 Accounts Receivable: Arrowstar fill in the blank 38 fill in the blank 39 To record sale of Accounts Receivable to third-party factor

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Record journal entries for the following transactions of Piano Wholesalers.

Jan. 1, 2018 Issued a $1,241,650 note to customer Arrowstar as terms of a merchandise sale. The merchandise’s cost to Piano Wholesalers is $608,000. Note contract terms included a 24-month maturity date and a 3.4% annual interest rate. Dec. 31, 2018 Piano Wholesalers records interest accumulated for 2018. Dec. 31, 2019 Piano Wholesalers converts Arrowstar’s dishonored note into account receivable. This includes accumulated interest for the 24-month period. April 12, 2020 Piano Wholesalers sells the outstanding debt from Arrowstar to a collection agency at 40% of the accounts receivable value.

Jan. 1, 2018	Notes Receivable: Arrowstar	fill in the blank 2	fill in the blank 3
	Sales Revenue	fill in the blank 5	fill in the blank 6
	To record sale in exchange for Notes Receivable: Arrowstar
Jan. 1, 2018	Cost of Goods Sold	fill in the blank 8	fill in the blank 9
	Merchandise Inventory	fill in the blank 11	fill in the blank 12
	To record the cost of sale
Dec. 31, 2018	Interest Receivable: Arrowstar	fill in the blank 14	fill in the blank 15
	Interest Revenue	fill in the blank 17	fill in the blank 18
	To record interest accumulated in 2018
Dec. 31, 2019	Accounts Receivable: Arrowstar	fill in the blank 20	fill in the blank 21
	Notes Receivable: Arrowstar	fill in the blank 23	fill in the blank 24
	Interest Receivable: Arrowstar	fill in the blank 26	fill in the blank 27
	Interest Revenue	fill in the blank 29	fill in the blank 30
	To record conversion of note to Accounts Receivable, dishonored note
April 12, 2020	Cash	fill in the blank 32	fill in the blank 33
	Factoring Expense	fill in the blank 35	fill in the blank 36
	Accounts Receivable: Arrowstar	fill in the blank 38	fill in the blank 39
	To record sale of Accounts Receivable to third-party factor

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