Question

The general ledger of Pop's Fireworks includes the following account balances in 2021:

Accounts Debit Credit
Cash $21,200
Accounts Receivable 41,500
Allowance for Uncollectible Accounts $2,200
Supplies 6,700
Notes Receivable (8%, due in 2 years) 10,000
Land 85,000
Accounts Payable 12,300
Common Stock 106,000
Retained Earnings 29,900
Service Revenue 124,800
Salaries Expense 70,900
Utilities Expense 24,200
Supplies Expense 15,700
Totals $275,200 $275,200

In addition, the following transactions occurred during 2021 and are not yet reflected in the account balances above:

June 3 Provide additional services on account for $7,000. All services on account include terms 2/10, n/30.
June 8 Receive cash from customers within 10 days of the services being provided on account. The customers were originally charged $5,000.
November 15 Write off customer accounts of $1,500 as uncollectible.

Required:
Record each of the transactions listed above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

June 3

Account Receivable $7,000 (debit)

Service Revenue $7,000 (credit)

June 8

Cash $4,500 (debit)

Discount allowed $500 (debit)

Accounts Receivables $5,000 (credit)

November 15

Bad Debt $1,500 (debit)

Accounts Receivables $1,500 (credit)

Step-by-step explanation

The above transactions must be adjusted as they affect our transactions at the reporting date. Remember to grant the cash discount on early settlement of the payment made on June 8. The policy of sales on account is on the terms of 2% cash discount on payments made within 10 days.