Question

• March. 4, 2012 Sold goods at a cost of $250,000 for $300,000 to nelson company, 2/10; n/30; FOB destination and transportation cost of $10,000 was paid by the nelson company .  

• The seller reimbursed nelson company with the delivery fee.

March 8 Nelson company returned $30,000 items that were originally $20,000.

April 6, Received a 120-day 9% note from nelson company as a promise to pay the debt off .

Required:

• Record all necessary entries for the above transactions.

• note was honored, make necessary journal entries on the maturity date (State the maturity date).

• note was dishonored, make necessary journal entries on the maturity date.

• May 3, the note was discounted at 8% from the Westcher bank, make necessary entries for the discounting of the note.

• discounted note was honored on the maturity date, make necessary entries if any on the maturity date.

• previously discounted note was dishonored, the bank charged a fee of $140, make necessary entries for this fee from the bank.

Answer 1