Question

On January 1, 2017, Bonita Industries had Accounts Receivable of $53,100 and Allowance for Doubtful Accounts of $3,600. Bonita Industries prepares financial statements annually. During the year, the following selected transactions occurred:

Jan. 5 Sold $4,500 of merchandise to Rian Company, terms n/30.

Feb. 2 Accepted a $4,500, 4-month, 8% promissory note from Rian Company for balance due.

Feb 12 Sold $11,520 of merchandise to Cato Company and accepted Cato’s $11,520, 2-month, 10% note for the balance due.

Feb 26 Sold $11,600 of merchandise to Malcolm Co., terms n/10.

Apr. 5 Accepted a $11,600, 3-month, 8% note from Malcolm Co. for balance due.

Apr. 12 Collected Cato Company note in full.

June 2 Collected Rian Company note in full.

June 15 Sold $2,100 of merchandise to Gerri Inc. and accepted a $2,100, 6-month, 11% note for the amount due.

Journalize the transactions. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Date Account Titles and Explanation Debit Credit

Answer 1

Journal Entry

Date Account and Explanation Debit Credit

Jan 5 Account receivable 4500

Sales revenue 4500

(To record sales)

Feb 2 Notes receivable 4500

Account receivable 4500

(To record notes receivable)

Feb 12 Notes receivable 11520

Sales revenue 11520

(To record sales)

Feb 26 Account receivable 11600

Sales revenue 11600

(To record sales)

Apr 5 Notes receivable 11600

Account receivable 11600

(To record notes receivable)

Apr 12 Cash 11712

Notes receivable 11520

Interest revenue 192

(To record amount received)

June 2 Cash 4620

Notes receivable 4500

Interest revenue 120

(To record amount collect)

June 15 Notes receivable 2100

Sales revenue 2100

(To record sales)