Question

The following selected transactions are from King Company.

Year 1

Dec. 16 Accepted a $13,200, 60-day, 12% note in granting Jean Clark a time extension on his past-due account receivable.
31 Made an adjusting entry to record the accrued interest on the Clark note.

Year 2

Feb. 14 Received Clark’s payment of principal and interest on the note dated December 16.
Mar. 2 Accepted a $7,000, 6%, 90-day note in granting a time extension on the past-due account receivable from Walker Co.
17 Accepted a $18,000, 30-day, 7% note in granting Juan Perez a time extension on her past-due account receivable.
Apr. 16 Perez dishonored her note.
May 31 Walker Co. dishonored its note.
Aug. 7 Accepted a $16,000, 90-day, 6% note in granting a time extension on the past-due account receivable of Taylor Co.
Sep. 3 Accepted a $17,400, 60-day, 10% note in granting Tony Turner a time extension on his past-due account receivable.
Nov. 2 Received payment of principal plus interest from Turner for the September 3 note.
Nov. 5 Received payment of principal plus interest from Taylor for the August 7 note.
Dec. 1
Wrote off the Perez account against the Allowance for Doubtful Accounts.

2) March 2 Mar. 2 Accepted an $7,000, 6%, 90-day note in granting a time extension on the past-due account receivable from Walker Co.

3) Mar. 17 Accepted a $18,000, 30-day, 7% note in granting Juan Perez a time extension on her past-due account receivable.

4) April 16 Apr. 16 Perez dishonored her note.

5) May 31 Walker Co. dishonored its note.

6) Aug. 7 Accepted a(n) $16,000, 90-day, 6% note in granting a time extension on the past-due account receivable of Taylor Co.

7) Sept. 3 Accepted a $17,400, 60-day, 10% note in granting Tony Turner a time extension on his past-due account receivable.

8) Nov. 2 Received payment of principal plus interest from Turner for the September 3 note.

9) Nov. 5 Received payment of principal plus interest from Taylor for the August 7 note.

10) Dec. 1 Wrote off the Perez account against Allowance for Doubtful Accounts. No additional interest was accrued.

Options for General Journal

000: No journal entry required
101: Cash
103: Account receivable - Other
104: Accounts receivable - T. Turner
105: Accounts receivable - Walker Co.
106: Accounts receivable - Taylor
107: Accounts receivable - J. Perez
108: Accounts receivable - J. Clark
109: Allowance for doubtful accounts
110: Notes receivable - T. Turner
111: Notes receivable - Walker Co.
112: Notes receivable - Taylor
113: Notes receivable - J. Perez
114: Notes receivable - J. Clark
118: Interest receivable
120: Merchandise inventory
201: Accounts payable - T. Turner
202: Accounts payable - Walker Co.
203: Accounts payable - Taylor
204: Accounts payable - J. Clark
209: Salaries payable
226: Unearned fees
301: Owner's Capital
302: Owner's withdrawals
403: Sales
404: Sales returns and allowances
405: Sales discounts
406: Interest revenue
600: Cost of goods sold
602: Purchases
603: Purchases returns and allowances
604: Purchases discounts
640: Rent expense
652: Freight-in
655: Bad debts expense
660: Delivery expense
665: Interest expense
700: Income summary

Answer 1

note receivable 13,200 debit

account receivables 13,200 credit

--to record note acceptance--

interest receivable 132 debit

interest revenue 132 credit

--to record interest--

cash 13,464 debit

interest receivable 132 credit

note receivable 13,200 credit

interest revenue 132 credit

--to record Clark note bein honored--

note receivables 18,000 debit

account receivables 18,000 credit

note receivables 7,000 debit

account receivables 7,000 credit

--to record note acceptance--

account receivables 7,105 debit

note receivables 7,000 credit

interest receivable 105 credit

account receivables 18,105 debit

note receivables 18,000 credit

interest receivable 105 credit

--to record dishonored notes--

note receivables 16,000 debit

account receivables 16,000 credit

--to record note acceptance--

note receivables 17,400 debit

account receivables 17,400 credit

--to record note acceptance--

cash 17,690 debit

interest revenue 290 credit

note receivable 17,400 credit

--to record Turner honor note--

cash 17,197 debit

interest revenue 297 credit

note receivable 16,900 credit

-- to record Taylor honoring the note--

allowance for doubtful account 18,105 debit

account receivables 1,105 credit

--to record Perez write-off--

Step-by-step explanation:

Clark Note

13,200 x 12% x 1/12 = 132

Turner Note

17,400 x 10% x 2/12 = 290

Taylor Note

16,900 x 6% x 3/12 = 297

Walker

7,000 x 6% x 3/12 = 105

Perez account:

18,000 x 7% x 1/12 = 105