The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

Jan.

 21. Sold merchandise on account to Black Tie Co., $28,000. The cost of merchandise sold was $16,800.

Mar.

 18. Accepted a 60-day, 6% note for $28,000 from Black Tie Co. on account.

May

 17. Received from Black Tie Co. the amount due on the note of March 18.

June

 15. Sold merchandise on account to Pioneer Co. for $17,700. The cost of merchandise sold was $10,600.

 21. Loaned $18,000 cash to JR Stutts, receiving a 30-day, 8% note.

 25. Received from Pioneer Co. the amount due on the invoice of June 15.

July

 21. Received the interest due from JR Stutts and a new 60-day, 9% note as a renewal of the loan of June 21. (Record both the debit and the credit to the notes receivable account.)

Sept.

 19. Received from JR Stutts the amount due on her note of July 21.

 22. Sold merchandise on account to Wycoff Co., $20,000. The cost of merchandise sold was $12,000.

Oct.

 14. Accepted a 30-day, 6% note for $20,000 from Wycoff Co. on account.

Nov. 

 13. Wycoff Co. dishonored the note dated October 14.

Dec.

 28. Received from Wycoff Co. the amount owed on the dishonored note, plus interest for 45 days at 8% computed on the maturity value of the note.

Instructions

Journalize the entries to record the transactions.

Answer:

 Jan. 21 Accounts Receivable—Black Tie Co. 28,000

Sales28,000

21 Cost of Merchandise Sold 16,800

Merchandise Inventory16,800

 Mar. 18 Notes Receivable28,000

Accounts Receivable—Black Tie Co. 28,000

 May 17 Cash28,280

Notes Receivable28,000

Interest Revenue280

($28,000 × 6% × 60 ÷ 360).

 June 15 Accounts Receivable—Pioneer Co. 17,700

Sales17,700

15 Cost of Merchandise Sold 10,600

Merchandise Inventory10,600

21 Notes Receivable18,000

Cash18,000

25 Cash17,700

Accounts Receivable—Pioneer Co. 17,700

 July 21 Notes Receivable18,000

Cash120

Notes Receivable18,000

Interest Revenue120

($18,000 × 8% × 30 ÷ 360).

 Sept. 19 Cash18,270

Notes Receivable18,000

Interest Revenue270

($18,000 × 9% × 60 ÷ 360).

22 Accounts Receivable—Wycoff Co. 20,000

Sales20,000

 Sept. 22 Cost of Merchandise Sold 12,000

Merchandise Inventory12,000

 Oct. 14 Notes Receivable20,000

Accounts Receivable—Wycoff Co. 20,000

 Nov. 13 Accounts Receivable—Wycoff Co. 20,100

Notes Receivable20,000

Interest Revenue100

($20,000 × 6% × 30 ÷ 360).

 Dec. 28 Cash20,301

Accounts Receivable—Wycoff Co. 20,100

Interest Revenue201

($20,100 × 8% × 45 ÷ 360).