Following are selected transactions Deshawn Company for 2010 and 2011.
|Dec. 13||Accepted a $27,000, 45-day, 10% note dated December 13 in granting Latisha Clark a time extension on her past-due account receivable.|
|31||Prepared an adjusting entry to record the accrued interest on the Clark note.|
|Jan. 27||Received Clark's payment for principal and interest on the note dated December 13.|
|Mar. 3||Accepted a $21,000, 7%, 90-day note dated March 3 in granting a time extension on the past due account receivable of Shandi Company.|
|17||Accepted a $19,000, 30-day, 9% note dated March 17 in granting Juan Torres a time extension on his past-due account receivable.|
|Apr. 16||Torres dishonors his note when presented for payment.|
|May 1||Wrote off the Torres account against the Allowance for Doubtful Accounts.|
|June 1||Received the Shandi payment for principal and interest on the note dated March 3.|
Prepare journal entries for the above transactions for 2011.
Account receivable is the amount that has been accrued as a result of operating activities and is due to be received in the upcoming period. The account receivable is categorized as current assets.
Answer and Explanation: 1
The journal entry is as follows:
|Date||Particulars||Debit ($)||Credit ($)|
|December 13, 2010||Note receivable||27,000|
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fromChapter 3 / Lesson 20
Learn what accounts receivables (AR) are and understand their purpose in business. Explore different examples of AR and what the journal entry for it is.