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22 November, 08:12

Prepare journal entries to record the following transactions entered into by the Merando Company: 2016 June 1 Received a $10,000, 6%, 1-year note from Dan Gore as full payment on his account. Nov. 1 Sold merchandise on account to Barlow, Inc., for $14,000, terms 2/10, n/30. Nov. 5Barlow, Inc., returned merchandise worth $1,000. Nov. 9 Received payment in full from Barlow, Inc. Dec. 31 Accrued interest on Gore's note. 2017 June 1 Dan Gore honored his promissory note by sending the face amount plus interest. Date Account Title and Explanation Debit Credit

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  1. 22 November, 09:10
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    Answer and Explanation:

    The Journal entries are prepared below:-

    1. Notes Receivable Dr $10,000

    To dan Gore $10,000

    (Being notes receivable is recorded)

    2. Barlow Dr $14,000

    To Inventories $14,000

    (Being inventory is recorded)

    3. Inventories Dr, $1,000

    To Barlow $1,000

    (Being inventory is recorded)

    4. Cash Dr, $12,740 ($13,000 * 98%)

    Discount Dr, 260

    To Barlow $13,000

    (Being cash received is recorded)

    5. Interest receivable Dr, $350 ($10,000 * 6% * 7 : 12)

    To Interest revenue $350

    (Being interest revenue is recorded)

    6. Cash Dr, $10,600

    To Interest receivable $350

    To Interest revenue $250 ($10,000 * 6% * 5 : 12)

    To Notes receivable $10,000

    (Being cash received is recorded)
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