Question

On November 30, Petrov Co. has $140,200 of accounts receivable and uses the perpetual inventory system. Dec. 4 Sold $9,430 of merchandise (that had cost $6,035) to customers on credit, terms n/30. 9 Sold $19,628 of accounts receivable to Main Bank. Main charges a 4% factoring fee. 17 Received $5,187 cash from customers in payment on their accounts. 27 Borrowed $11,216 cash from Main Bank, pledging $14,581 of accounts receivable as security for the loan.

Prepare journal entries to record the above selected July transactions. (The company uses the perpetual inventory system.) (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)
Date General Journal Debit Credit July 2July 04 No Transaction Recorded 3July 09 No Transaction Recorded 4ly 17 No Transaction Recorded 5ly 27 No Transaction Recorded

Answer 1

Petrov Co.

Journal

Date Account Titles Debit Credit

Dec. 4 Accounts receivable $9,430

Sales revenue $9,430

To record the sale of goods on account, terms n/30.

Dec. 4 Cost of goods sold $6,035

Inventory $6,035

To record the cost of goods sold.

Dec. 9 Cash (Main Bank) $18,843

Finance charges $785

Accounts Receivable $19,628

To record the factoring of accounts receivable for cash.

Dec. 17 Cash $5,187

Accounts receivable $5,187

To record the receipt of cash from customers on account.

Dec. 27 Cash $11,216

Finance charges $3,365

Bank Loan $14,581

To record the pledge of accounts receivable as security for a loan

Step-by-step explanation:

a) Data and Transaction Analysis:

Dec. 4 Accounts receivable $9,430 Sales revenue $9,430, terms n/30.

Dec. 4 Cost of goods sold $6,035 Inventory $6,035

Dec. 9 Cash (Main Bank) $18,843 Finance charges $785 Accounts Receivable $19,628

Dec. 17 Cash $5,187 Accounts receivable $5,187

Dec. 27 Cash $11,216 Finance charges $3,365 Bank Loan $14,581