On August 2, Jun Co. receives a $6,000, 90-day, 12% note from customer Ryan Albany as payment on his $6,000 account. Prepare Jun’s journal entry assuming the note is honored by the customer on October 31 of that same year.
The journal entry of the note on October 31, i.e., its maturity period, will be recorded along with the interest revenue up to its expiry date.
(To record the issuance of the notes)
(To record the cash collected)
Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, a 4% service charge for credit card sales is assessed. The second credit card that Levine accepts is the Continental Card. Continental assesses a 2.5% charge on sales for using its card. Prepare journal entries to record the following selected credit card transactions of Levine Company.
Apr. 8 Sold merchandise for $8,400 (that had cost $6,000) and accepted the customer's Sunburst Bank Card.
12 Sold merchandise for $5,600 (that had cost $3,500) and accepted the customer’s Continental Card.
The following list describes aspects of either the allowance method or the direct write-off method to account for bad debts. For each item listed, indicate if the statement best describes either the allowance (A) method or the direct write-off (DW) method
3. The write-off of a specific account does not affect net income.
The following list describes aspects of either the allowance method or the direct write-off method to account for bad debts. For each item listed, indicate if the statement best describes either the allowance (A) method or the direct write-off (DW) method.
5. Sales and any bad debt expense are usually not recorded in the same period; thus, proper matching (of revenue and expense recognition) does not consistently occur.
Each member of a team is to participate in estimating uncollectibles using the aging schedule and percents shown in Problem 7-3A. The division of labor is up to the team. Your goal is to accurately complete this task as soon as possible. After estimating uncollectibles, check your estimate with the instructor. If the estimate is correct, the team then should prepare the adjusting entry and the presentation of accounts receivable (net) for the December 31, 2017, balance sheet.
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