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31 August, 11:00

Prepare journal entries to record the following transactions entered into by the Ayayai Corp.: (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

2021

June 1 Received a $12,000, 8%, 1-year note from Dan Gore as full payment on his account.

Nov. 1 Sold merchandise on account to Barlow, Inc., for $16,000, terms 3/10, n/30.

Nov. 5 Barlow, Inc., returned merchandise worth $1,300.

Nov. 9 Received payment in full from Barlow, Inc.

Dec. 31 Accrued interest on Gore's note.

2022

June 1 Dan Gore honored his promissory note by sending the face amount plus interest.

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  1. 31 August, 11:47
    0
    note receivables 12,000 debit

    accounts receivables 12,000 credit

    --to record reception of note from Dan Gore to settle his account--

    Accounts receivables 16000 debit

    Sales revenues 16.000 credit

    --to record sale in account--

    sales returns&allowance 1,300 debit

    Accounts receivables 1,300 credit

    --to record returned goods--

    cash 14,259 debit

    sales discount 441 debit

    Accounts receivable 14,700 credit

    --to record payment from Barlow--

    cash 12,960 debit

    interest revenue 960 credit

    note receivable 12,000 credit

    --to record collection of promissory note from Dan Gore--

    Explanation:

    Barlow invoice transactions:

    16,000 invoice nominal

    - 1,300 returned goods

    14,700 amount subject to discount of 3%

    - 441 discount as collected within first ten days

    14,259 cash proceeds

    Dan Gore promissory note:

    principal x rate x time

    12,000 x 8% per year x 1 year = 960 interest revenue

    total 12,000 + 960 = 12,960
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