Problem 1: At December 31, 2019, Vaughn Company had a credit balance of $19,800 in Allowance for Doubtful Accounts. During 2020, Vaughn wrote off accounts totaling $11,800. One of those accounts ($2,600) was later collected. At December 31, 2020, an aging schedule indicated that the balance in Allowance for Doubtful Accounts should be $31,100.
Required: Prepare journal entries to record the 2020 transactions of Vaughn Company?
Problem 2: Kingbird Supply Co. has the following transactions related to notes receivable during the last 2 months of 2020. The company does not make entries to accrue interest except at December 31.
Nov. 1 Loaned $25,200 cash to Manny Lopez on a 12-month, 10% note.
Dec. 11 Sold goods to Ralph Kremer, Inc., receiving a $65,250, 90-day, 8% note.
Dec. 16 Received a $65,280, 180 day, 10% note in exchange for Joe Fernetti's outstanding accounts receivable.
Dec. 31 Accrued interest revenue on all notes receivable.
Required:
1. Journalize the transactions for Kingbird Supply Co.?
2. Record the collection of the Lopez note at its maturity in 2021?