Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2021: Mar. 17 Accounts receivable of $3,000 were written off as uncollectible. The company uses the allowance method. 30 Loaned an officer of the company $33,000 and received a note requiring principal and interest at 8% to be paid on March 30, 2022. May 30 Discounted the $33,000 note at a local bank. The bank’s discount rate is 9%. The note was discounted without recourse and the sale criteria are met. June 30 Sold merchandise to the Blankenship Company for $25,000. Terms of the sale are 2/10, n/30. Weldon uses the gross method to account for cash discounts. July 8 The Blankenship Company paid its account in full. Aug. 31 Sold stock in a nonpublic company with a book value of $6,300 and accepted a $8,000 noninterest-bearing note with a discount rate of 9%. The $8,000 payment is due on February 28, 2022. The stock has no ready market value. Dec. 31 Weldon estimates that the allowance for uncollectible accounts should have a balance in it at year-end equal to 3% of the gross accounts receivable balance of $920,000. The allowance had a balance of $25,000 at the start of 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2021:

Mar.	17	Accounts receivable of $3,000 were written off as uncollectible. The company uses the allowance method.
	30	Loaned an officer of the company $33,000 and received a note requiring principal and interest at 8% to be paid on March 30, 2022.
May	30	Discounted the $33,000 note at a local bank. The bank’s discount rate is 9%. The note was discounted without recourse and the sale criteria are met.
June	30	Sold merchandise to the Blankenship Company for $25,000. Terms of the sale are 2/10, n/30. Weldon uses the gross method to account for cash discounts.
July	8	The Blankenship Company paid its account in full.
Aug.	31	Sold stock in a nonpublic company with a book value of $6,300 and accepted a $8,000 noninterest-bearing note with a discount rate of 9%. The $8,000 payment is due on February 28, 2022. The stock has no ready market value.
Dec.	31	Weldon estimates that the allowance for uncollectible accounts should have a balance in it at year-end equal to 3% of the gross accounts receivable balance of $920,000. The allowance had a balance of $25,000 at the start of 2021.

No
Date
General Journal
Debit
Credit
March 17, 2021
Allawance for uncollectible accounts
3,000 O
Accounts receivable
3,000 O
2
March 30, 2021
Notes receivable
33,000
Cash
33,000 O
3
May 30, 2021
Interest receivable
440 O
Interest revenue
440
May 30, 2021
Cash
32,965 x
Loss an sale of nates rnceivable
473 O
Interest receivable
440
Nates receivable
33,000
June 30, 2021
Accounts receivable
25,000 O
Sales revenue
25,000
July 08, 2021
Cash
24,500
Sales discounts
500 O
Accounts receivable
25,000 O
7
August 31, 2021 Notes receivable
8,000 O
Investments
6,300
Discount an notes receivable
360
Gain on sale af investments
1,340
December 31, 202 Bad debt expense
27,600 0
Allawance for uncollectible accounts
27,600
December 31, 202 Discount on notes receivable
240 8
Interest revenue
240
ololo

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