Question - Journal Entries for Accounts and Notes Receivable
Jun.8 Pittsburgh, Inc., began business on January 1. Certain transactions for the year follow:
Aug.7 Received a $33,000, 60 day, eight percent note on account from J. Albert.
Sep.1 Received payment from J. Albert on her note (principal plus interest).
Dec.16 Received an $39,000, 120 day, nine percent note from R.T. Matthews Company on account.
Dec.30 Received a $31,800, 45 day, ten percent note from D. Leroy on account.
Dec.31 R.T. Matthews Company failed to pay its note.
Dec.31 Wrote off R.T. Matthews account as uncollectible. Pittsburgh, Inc. uses the allowance method of providing for credit losses.
Dec.31 Recorded expected credit losses for the year by an adjusting entry. Accounts written off during this first year have created a debit balance in the Allowance for Doubtful Accounts of $48,200. An analysis of aged receivables indicates that the desired balance of the allowance account should be $43,000.
Dec.31 Made the appropriate adjusting entries for interest.
Required - Record the foregoing transactions and adjustments in general journal form. (Use 360 days for all interest calculations. Round all Interest Income calculations to the nearest dollar.)