1.On November 15, 2010, Betty Corporation accepted a note receivable in place of an outstanding accounts receivable in the amount of $138,530. The note is due in 90 days and has an interest rate of 9.25%. What is the appropriate journal entry to record at maturity?
2.Morgan Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Morgan Company wrote off the $2,800 uncollectible account of its customer, P. Stanley. On July 10, Morgan received a check for the full amount of $2,800 from Stanley. On July 10, the entry or entries Morgan makes to record the recovery of the bad debt is:
3.Lusy Company has an agreement with a major credit card company which calls for cash to be received immediately upon deposit of Lusy customers' credit card sales receipts. The credit card company receives 4% of card sales as its fee. If Lusy has $4,000 in credit card sales, which of the following statements are true?
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Lusy debits Accounts Receivable ? Credit Card Co $4,000 |
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Lusy credits Sales $3,840 |
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Lusy debits Accounts Receivable ? Credit Card Co $3,840 |
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Lusy debits Cash $4,000 |
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Lusy debits Cash $3,840 |