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Business Accounting Loose Leaf for Financial Accounting: Information for Decisions

1. Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To Prepare: Journal entriesfor the given transactions. Date Accounts title and explanation Debit $ Credit $ 2017 1 s t Nov. 2017 Notes receivable- SJ 4,800 Account receivables- SJ 4,800 (to record account receivable changed into notes receivable) 31 s t Dec. 2017 Interest receivable 1 64 Interest revenue 64 (to record interest receivable) 30th Jan. 2018 Cash 4,896 Interest revenue 32 Interest receivable 64 Notes receivable 4,800 (to record amount received from SJ) 28 t h Feb. 2018 Notes receivable- KC 12,600 Account receivables- KC 12,600 (to record account receivable changed into notes receivable) 1 s t Mar. 2018 Notes receivable- MS 6,200 Account receivables- MS 6,200 (to record account receivable changed into notes receivable) 30 t h Mar. 2018 Account receivables − KC 12,684 Interest revenue 2 84 Notes receivable- KC 12,600 (to record the dishonored note of KC) 30 t h Apr. 2018 Cash 6,324 Interest revenue 3 124 Notes receivable 6,200 (to record the amount received from MS with interest) 15 t h June 2018 Notes receivable- RS 2,000 Accounts receivable- RS 2,000 (to record account receivable changed into notes receivable) 21 s t June 2018 Notes receivable- JF 9,500 Account receivables- JF 9,500 (to record account receivable changed into notes receivable) 14 t h Aug. 2018 Cash 2,032 Interest revenue 4 32 Notes receivable- RS 2,000 (to record the amount received from RS with interest) 19 t h Sep. 2018 Cash 9,690 Interest revenue 5 190 Notes receivable-JF 9,500 (to record the amount received from JF with interest) 30 t h Nov. 2018 Allowance for doubtful debts 12,684 Accounts receivable- KC 12,684 (to write off accounts receivable) Working notes 1. Interest on SJ’s notes receivable: = $ 4 , 800 × 8 % × 60 360 = $ 64 2. Interestrevenue on KC’s note: = $ 12 , 600 × 8 % × 30 360 = $ 84 3. Interest revenue on MS’s note: = $ 6 , 200 × 12 % × 60 360 = $ 124 4. Interest revenue on RS’s note: = $ 2 , 000 × 8 % × 72 360 = $ 32 5. Interest revenue on JF’s note: = $ 9 , 500 × 8 % × 90 360 = $ 190 2. Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To explain: The accounting principle along with the reason required,in case a company keeps accounts receivable as a security for an outstanding loan. The accounting principle that is required is the principle of full disclosure. The accounting principle that needs to be satisfied is the principle of “full disclosure.” If the business is pledging its accounts receivable as a security for loan when the loan is still outstanding at the end of the period, it needs to disclose this information in its financial statements. This helps the creditor to have a legal right to take the amount of account receivable (collateral security) in case company fails to honor the obligation of paying the loan.

1. Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To Prepare: Journal entriesfor the given transactions. Date Accounts title and explanation Debit $ Credit $ 2017 1 s t Nov. 2017 Notes receivable- SJ 4,800 Account receivables- SJ 4,800 (to record account receivable changed into notes receivable) 31 s t Dec. 2017 Interest receivable 1 64 Interest revenue 64 (to record interest receivable) 30th Jan. 2018 Cash 4,896 Interest revenue 32 Interest receivable 64 Notes receivable 4,800 (to record amount received from SJ) 28 t h Feb. 2018 Notes receivable- KC 12,600 Account receivables- KC 12,600 (to record account receivable changed into notes receivable) 1 s t Mar. 2018 Notes receivable- MS 6,200 Account receivables- MS 6,200 (to record account receivable changed into notes receivable) 30 t h Mar. 2018 Account receivables − KC 12,684 Interest revenue 2 84 Notes receivable- KC 12,600 (to record the dishonored note of KC) 30 t h Apr. 2018 Cash 6,324 Interest revenue 3 124 Notes receivable 6,200 (to record the amount received from MS with interest) 15 t h June 2018 Notes receivable- RS 2,000 Accounts receivable- RS 2,000 (to record account receivable changed into notes receivable) 21 s t June 2018 Notes receivable- JF 9,500 Account receivables- JF 9,500 (to record account receivable changed into notes receivable) 14 t h Aug. 2018 Cash 2,032 Interest revenue 4 32 Notes receivable- RS 2,000 (to record the amount received from RS with interest) 19 t h Sep. 2018 Cash 9,690 Interest revenue 5 190 Notes receivable-JF 9,500 (to record the amount received from JF with interest) 30 t h Nov. 2018 Allowance for doubtful debts 12,684 Accounts receivable- KC 12,684 (to write off accounts receivable) Working notes 1. Interest on SJ’s notes receivable: = $ 4 , 800 × 8 % × 60 360 = $ 64 2. Interestrevenue on KC’s note: = $ 12 , 600 × 8 % × 30 360 = $ 84 3. Interest revenue on MS’s note: = $ 6 , 200 × 12 % × 60 360 = $ 124 4. Interest revenue on RS’s note: = $ 2 , 000 × 8 % × 72 360 = $ 32 5. Interest revenue on JF’s note: = $ 9 , 500 × 8 % × 90 360 = $ 190 2. Introduction: Accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit. It is merely a promise to repay the vendor. To explain: The accounting principle along with the reason required,in case a company keeps accounts receivable as a security for an outstanding loan. The accounting principle that is required is the principle of full disclosure. The accounting principle that needs to be satisfied is the principle of “full disclosure.” If the business is pledging its accounts receivable as a security for loan when the loan is still outstanding at the end of the period, it needs to disclose this information in its financial statements. This helps the creditor to have a legal right to take the amount of account receivable (collateral security) in case company fails to honor the obligation of paying the loan.

Solution Summary: The author explains that accounts receivable are legitimately enforceable returns or payments which the organization will get from its clients who have bought its merchandise and services on credit.

Loose Leaf for Financial Accounting: Information for Decisions

Loose Leaf for Financial Accounting: Information for Decisions

9th Edition

ISBN: 9781260158762

Author: John J Wild

Publisher: McGraw-Hill Education

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Chapter 7 Solutions

Loose Leaf for Financial Accounting: Information for Decisions

Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - Prob. 3DQ Ch. 7 - Prob. 4DQ Ch. 7 - Prob. 5DQ Ch. 7 - Prob. 6DQ Ch. 7 - Prob. 7DQ Ch. 7 - Prob. 8DQ Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ

Ch. 7 - Prob. 1QS Ch. 7 - Solstice Company determines on October 1 that it...Ch. 7 - Solstice Company determines on October 1 that it...Ch. 7 - The following list describes aspects of either the...Ch. 7 - Gomez Corp. uses the allowance method to account...Ch. 7 - Prob. 6QS Ch. 7 - Prob. 7QS Ch. 7 - Prob. 8QS Ch. 7 - On August 2, Jun Co. receives a $6,000, 90-day,...Ch. 7 - Prob. 10QS Ch. 7 - Prob. 11QS Ch. 7 - Prob. 12QS Ch. 7 - Prob. 13QS Ch. 7 - Prob. 14QS Ch. 7 - Prob. 1E Ch. 7 - Prob. 2E Ch. 7 - Prob. 3E Ch. 7 - Prob. 4E Ch. 7 - Prob. 5E Ch. 7 - Prob. 6E Ch. 7 - Prob. 7E Ch. 7 - Prob. 8E Ch. 7 - Prob. 9E Ch. 7 - Prob. 10E Ch. 7 - Prob. 11E Ch. 7 - Prob. 12E Ch. 7 - Prob. 13E Ch. 7 - Prob. 14E Ch. 7 - Prob. 15E Ch. 7 - Prob. 16E Ch. 7 - Prob. 17E Ch. 7 - Prob. 18E Ch. 7 - Prob. 1PSA Ch. 7 - Prob. 2PSA Ch. 7 - Prob. 3PSA Ch. 7 - Prob. 4PSA Ch. 7 - The following selected transaction are Ohlm...Ch. 7 - Prob. 1PSB Ch. 7 - At December 31, 2018, Ingleton Company reports the...Ch. 7 - Prob. 3PSB Ch. 7 - Prob. 4PSB Ch. 7 - Prob. 5PSB Ch. 7 - Prob. 7SP Ch. 7 - Prob. 1GLP Ch. 7 - Prob. 1FSA Ch. 7 - Prob. 2FSA Ch. 7 - Prob. 3FSA Ch. 7 - Prob. 1BTN Ch. 7 - Prob. 2BTN Ch. 7 - Prob. 4BTN Ch. 7 - Sheryl Sandberg and Mark Zuckerberg of Facebook...

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