Question

On August 2, Jun Co. receives a $7,400, 90-day, 13.5% note from customer Ryan Albany as payment on his $7,400 account receivable.

Prepare Jun's journal entry assuming the note is honored by the customer on October 31 of that same year. (Do not round intermediate calculations. Round your answers to nearest whole dollar value. Use 360 days a year.)

• Record cash received on note plus interest.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Oct 31

Prepare journal entries to record the following transactions of Namco. (Use 360 days a year.)

April		1		Accepted a $6,600, 90-day, 10% note from Travis in granting a time extension on his past-due account receivable.
June		30		Travis dishonored his note.

• Record receipt of note on account.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
April 01

• Record the maturity value of Travis' dishonored note.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
June 30

Net Zero Products, a wholesaler of sustainable raw materials, prepares the following aging of receivables analysis.

				Days Past Due
	Total			0			1 to 30				31 to 60				61 to 90				Over 90
Accounts receivable	$	143,000		$	88,000			$	26,000			$	11,000			$	8,000			$	10,000
Percent uncollectible					1	%			4	%			6	%			9	%			12	%

1. Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method.
2. Prepare the adjusting entry to record bad debts expense assuming the unadjusted balance in the Allowance for Doubtful Accounts is a $1,800 credit.

Estimate the balance of the Allowance for Doubtful Accounts using the aging of accounts receivable method.

	Accounts receivable		Percent uncollectible (%)
Not due:		x		=
1 to 30:		x		=
31 to 60:		x		=
61 to 90:		x		=
Over 90:		x		=
Estimated balance of allowance for uncollectibles

• Record estimated bad debts assuming that Allowance for Doubtful Accounts has a $1,800 credit balance.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec. 31

Answer 1

Jun Co.

Date	Account	Debit	Credit
Oct 31	Cash	7,650
	Notes Receivable		7,400
	Interest revenue (7,400*13.5%*90/360)		250

Namco

Net Zero Products

a
Age	Accounts receivable	Percent uncollectible	Amount uncollectible
0	88,000	1%	880
1 to 30	26,000	4%	1,040
31 to 60	11,000	6%	660
61 to 90	8,000	9%	720
Over 90	10,000	12%	1,200
Total	143,000		4,500

Estimated balance of allowance for doubtful accounts = 4,500 credit

Date	Account	Debit	Credit
Dec. 31	Bad debts expense (4,500 - 1,800)	2,700
	Allowance for doubtful accounts		2,700