Question 1: ABC company uses the estimate of sales method of accounting for uncollectible accounts. ABC estimates that 3% of all credit sales will be uncollectible. On January 1, 2005, the Allowance for Doubtful Accounts had a credit balance of $2,400. During 2005, ABC wrote-off accounts receivable totaling $1,800 and made credit sales of $100,000. After the adjusting entry, the December 31, 2005, balance in the Uncollectible Accounts Expense would be ________.
- $1,200
- $3,000
- $3,600
- $7,200
Question 2: A $6,000, 30-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is ________.
- debit Cash, $6,060; credit Notes Receivable, $6,060
- debit Accounts Receivable, $6,060; credit Notes Receivable, $6,000; Credit Interest Receivable, $60
- debit Notes Receivable, $6,060; credit Accounts Receivable, $6,060
- debit Accounts Receivable, $6,060; credit Notes Receivable, $6,000; Credit Interest Revenue,