Question

Entries for receipt and dishonor of notes receivable

Instructions

Chart of Accounts

Journal

Journalize the transactions in the accounts of Safari Games Co., which operates a riverboat casino. Refer to the Chart of Accounts for exact wording of account titles. Assume 360 days in a year.

All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.Instructions

Apr.	18.	Received a $60,000, 30-day, 7% note dated April 18 from Glenn Cross on account.
	30.	Received a $42,000, 60-day, 8% note dated April 30 from Rhoni Melville on account.
May	18.	The note dated April 18 from Glenn Cross is dishonored, and the customer’s account is charged for the note, including interest.
June	29.	The note dated April 30 from Rhoni Melville is dishonored, and the customer’s account is charged for the note, including interest.
Aug.	16.	Cash is received for the amount due on the dishonored note dated April 18 plus interest for 90 days at 8% on the total amount debited to Glenn Cross on May 18.
Oct.	22.	Wrote off against the allowance account the amount charged to Rhoni Melville on June 29 for the dishonored note dated April 30.

CHART OF ACCOUNTSSafari Games Co.General Ledger

	ASSETS
110	Cash
111	Petty Cash
121	Accounts Receivable-Glenn Cross
122	Accounts Receivable-Rhoni Melville
129	Allowance for Doubtful Accounts
131	Interest Receivable
132	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Store Equipment
192	Accumulated Depreciation-Store Equipment
193	Office Equipment
194	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Store Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
530	Office Salaries Expense
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Answer 1

	Date	account titles & Explanations					Debit	Credit
	18-Apr	Note receivable					60,000
		Account receivable-Glenn Cross						60,000
	30-Apr	Note receivable					42,000
		Account receivable-Rhoni Melville						42,000
	18-May	Account receivable-Glenn Cross					60,350
		Note receivable						60,000
		interest revenue		(60,000*7%*30/360)				350
	29-Jun	Account receivable-Rhoni Melville					42,560
		Note receivable						42,000
		interest revenue		(42,000*8%*60/360)				560
	16-Aug	Cash					61,557
		Account receivable						60,350
		interest revenue		(60,350*8%*90/360)				1207
	22-Oct	Allowance for uncollectible accounts					42,560
		Account receivable						42,560