Record journal entries for the following transactions of Wind Solutions. Jan. 1, 2018 Issued a $2,351,100 note to customer Solar Plex as terms of a merchandise sale. The merchandise’s cost to Wind Solutions is $1,006,650. Note contract terms included a 24-month maturity date, and a 2.1% annual interest rate. Dec. 31, 2018 Wind Solutions records interest accumulated for 2018. Dec. 31, 2019 Wind Solutions converts Solar Plex’s dishonored note into account receivable. This includes accumulated interest for the 24-month period. March 8, 2020 Wind Solutions sells the outstanding debt from Solar Plex to a collection agency at 25% of the accounts receivable value. If an amount box does not require an entry, leave it blank. If required, round your answers to two decimal places. Jan. 1, 2018 - Record sale Notes Receivable: Solar Plex Notes Receivable: Solar Plex Sales Revenue Sales Revenue Jan. 1, 2018 - Cost of sale Cost of Goods Sold Cost of Goods Sold Merchandise Inventory Merchandise Inventory Dec. 31, 2018 Interest Receivable: Solar Plex Interest Receivable: Solar Plex Interest Revenue Interest Revenue Dec. 31, 2019 Accounts Receivable: Solar Plex Accounts Receivable: Solar Plex Notes Receivable: Solar Plex Notes Receivable: Solar Plex - Select - - Select - - Select - - Select - Mar. 8, 2020 - Select - - Select - - Select - - Select - - Select - - Select -

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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Question

Record journal entries for the following transactions of Wind Solutions.

Jan. 1, 2018	Issued a $2,351,100 note to customer Solar Plex as terms of a merchandise sale. The merchandise’s cost to Wind Solutions is $1,006,650. Note contract terms included a 24-month maturity date, and a 2.1% annual interest rate.
Dec. 31, 2018	Wind Solutions records interest accumulated for 2018.
Dec. 31, 2019	Wind Solutions converts Solar Plex’s dishonored note into account receivable. This includes accumulated interest for the 24-month period.
March 8, 2020	Wind Solutions sells the outstanding debt from Solar Plex to a collection agency at 25% of the accounts receivable value.

If an amount box does not require an entry, leave it blank. If required, round your answers to two decimal places.

Jan. 1, 2018 - Record sale	Notes Receivable: Solar Plex	Notes Receivable: Solar Plex
	Sales Revenue	Sales Revenue
Jan. 1, 2018 - Cost of sale	Cost of Goods Sold	Cost of Goods Sold
	Merchandise Inventory	Merchandise Inventory
Dec. 31, 2018	Interest Receivable: Solar Plex	Interest Receivable: Solar Plex
	Interest Revenue	Interest Revenue
Dec. 31, 2019	Accounts Receivable: Solar Plex	Accounts Receivable: Solar Plex
	Notes Receivable: Solar Plex	Notes Receivable: Solar Plex
	- Select -	- Select -
	- Select -	- Select -
Mar. 8, 2020	- Select -	- Select -
	- Select -	- Select -
	- Select -	- Select -

Expert Solution

Step 1: Introduction

Note receivable is a financial instrument which is held as a promise of a payment after a certain period along with interest. The interest rate and time period of the note is mentioned on it. Note receivable is reported as an asset in the books of the holder.

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