On May 2, McLain Company lends $9,000 to Chang, Inc., issuing a 6-month, 9% not. at the maturity date, November 2, Chang indicates that it cannot pay.

Instructions

Prepare the entry to record the issuance of the note.
Prepare the entry to record the dishonor of the note, assuming that McLain Company expects collection will occur.
Prepare the entry to record the dishonor of the note, assuming that McLain Company does not expect collection in the future.

Solution

McLain Company
Journal Entries

Problems: Accounting for Receivables

Problem-1: Accounting for Receivables

At December 31, 2018, House Co. reported the following information on its balance sheet. Accounts receivable$960,000 Less: Allowance for doubtful accounts80,000 During 2019, the company had the following transactions related...

Problem-2: Accounting for Receivables

Information related to Mingenback Company for 2019 is summarized below. Total credit sales$2,500,000 Accounts receivable at December 31875,000 Bad debts written off33,000 Instructions What amount of bad debt expense will...

Problem-3: Accounting for Receivables

Presented below is an aging schedule for Halleran Company. At December 31, 2019, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $12,000 Instructions Journalize and post...

Problem-4: Accounting for Receivables

Rigney Inc. uses the allowance method to estimate uncollectable accounts receivable. The company produced the following aging of the accounts receivable at year-end. Instructions Calculate the total estimated bad debts...

Problem-5: Accounting for Receivables

At December 31, 2019, the trial balance of Darby Company contained the following accounts before adjustment. Instructions Based on the information given, which method of accounting for bad debts is...

Problem-6: Accounting for Receivables

Farwell Company closes its books monthly. On September 30, selected ledger account balances are: Interest is computed using a 360-day year. During October, the following transactions were completed. Oct. 7Made...

Problem-7: Accounting for Receivables

On January 1, 2019, Harter Company had Accounts Receivable $139,000, Notes Receivable $25,000, and Allowance for Doubtful Accounts $13,200. The note receivable is from Willingham Company. It is a 4-month,...

Problem-8: Accounting for Receivables

Winter Company's balance sheet at December 31, 2020, is presented below. During January 2021, the following transactions occurred. Winter uses the perpetual inventory method. Jan. 1Winter accepted a 4-month, 8%...

Problem-9: Accounting for Receivables

Presented below are selected transactions of Molina Company, Molina sells in large quantities to other companies and also sells its product in a small retail outlet. March 1Sold merchandise on...

Problem-10: Accounting for Receivables

Presented below are two independent situations On January 6, Brumbaugh Co. sells merchandise on account to Pryor Inc. for $7,000, terms 2/10, n/30. On January 16, Pryor Inc. pays the...

Problem-11: Accounting for Receivables

The Jedger of Costello Company at the end of the current year shows Accounts Receivable $110,000, Sales Revenue $840,000, and Sales Returns and Allowances $20,000. Instructions If Costello uses the...

Problem-12: Accounting for Receivables

Menge Company has accounts receivable of $93,100 at March 31. Credit terms are 2/10, n/30. At March 31, Allowance for Doubtful Accounts has a credit balance of $1,200 prior to...

Problem-13: Accounting for Receivables

At December 31, 2019, Finzelberg Company had a credit balance of $15,000 in Allowance for Doubtful Accounts. During 2020, Finzelberg wrote off accounts totaling $11,000. One of those accounts ($1,800)...

Problem-14: Accounting for Receivables

On December 31, 2019, Ling Co. estimated that 2% of its net sales of $450,000 will become uncollectible. the company recorded this amount as an addition to Allowance for Doubtful...

Problem-15: Accounting for Receivables

Presented below are two independent situations. On March 3, Kitselman Appliances sells $650,000 of its receivables to Ervay Factors Inc. Ervay Factors assesses a finance charge of 3% of the...

Problem-16: Accounting for Receivables

Presented below are two independent situations. On April 2, Jennifer Eiston uses her JCPenney Company credit card to purchase merchandise from a JCPenney store for $1,500. On May 1, Elston...

Problem-17: Accounting for Receivables

Colaw Stores accepts both its own and national credit cards. During the year, the following selected summary transactions occurred. Jan. 15Made Colaw credit card sales totaling $18,000. (There were no...

Problem-18: Accounting for Receivables

Elburn Supply Co. has the following transactions related to notes receivable during the last 2 months of 2019. the company does not make entries to accrue interest except at December...

Problem-19: Accounting for Receivables

Record the following transactions for Redeker Co. in the general journal. 2020 May 1Received a $9,000, 12-month 10% note in exchange for Mark Chamber's outstanding accounts receivable. Dec. 31Accrued interest...

Problem-20: Accounting for Receivables

Vandiver Company had the following select transactions Apr. 1, 2019Accepted Goodwin Company's 12-month, 12% note in settlement of a $30,000 account receivable. July 1, 2019Loaned $25,000 cash to Thomas Slocombe...

Problem-21: Accounting for Receivables

On May 2, McLain Company lends $9,000 to Chang, Inc., issuing a 6-month, 9% not. at the maturity date, November 2, Chang indicates that it cannot pay. Instructions Prepare the...

Problem-22: Accounting for Receivables

Kerwick Company had accounts receivable of $100,000 on January 1, 2020. the only transactions that affected accounts receivable during 2020 were net credit sales of $1,000,000, cash collections of $920,000,...

Accounting for Receivables

Problem-21: Accounting for Receivables

Instructions

Solution

Latest Articles