The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems.
Jan. 3. Loaned $18,000 cash to Trina Gelhaus, receiving a 90-day, 8% note.
Feb.
10. Sold merchandise on account to Bradford & Co., $24,000. The cost of the merchandise sold was $14,400.
13. Sold merchandise on account to Dry Creek Co., $60,000. The cost of merchandise sold was $54,000.
Mar.
12. Accepted a 60-day, 7% note for $24,000 from Bradford & Co. on account.
14. Accepted a 60-day, 9% note for $60,000 from Dry Creek Co. on account.
Apr.
3. Received the interest due from Trina Gelhaus and a new 120-day, 9% note as a renewal of the loan of January 3. (Record both the debit and the credit to the notes receivable account.)
May
11. Received from Bradford & Co. the amount due on the note of March 12.
13. Dry Creek Co. dishonored its note dated March 14.
July
12. Received from Dry Creek Co. the amount owed on the dishonored note, plus interest for 60 days at 12% computed on the maturity value of the note.
Aug.
1. Received from Trina Gelhaus the amount due on her note of April 3.
Oct.
5. Sold merchandise on account to Halloran Co., $13,500. The cost of the merchandise sold was $8,100.
15. Received from Halloran Co. the amount of the invoice of October 5.
Instructions
Journalize the entries to record the transactions.
Answer:
Jan. 3 Notes Receivable18,000
Cash18,000
Feb. 10 Accounts Receivable—Bradford & Co. 24,000
Sales24,000
10 Cost of Merchandise Sold 14,400
Merchandise Inventory14,400
13 Accounts Receivable—Dry Creek Co. 60,000
Sales60,000
13 Cost of Merchandise Sold 54,000
Merchandise Inventory54,000
Mar. 12 Notes Receivable24,000
Accounts Receivable—Bradford & Co. 24,000
14 Notes Receivable60,000
Accounts Receivable—Dry Creek Co. 60,000
Apr. 3 Notes Receivable18,000
Cash360
Notes Receivable18,000
Interest Revenue360
($18,000 × 8% × 90 ÷ 360).
May 11 Cash24,280
Notes Receivable24,000
Interest Revenue280
($24,000 × 7% × 60 ÷ 360).
13 Accounts Receivable—Dry Creek Co. 60,900
Notes Receivable60,000
Interest Revenue900
($60,000 × 9% × 60 ÷ 360).
July 12 Cash62,118
Accounts Receivable—Dry Creek Co. 60,900
Interest Revenue1,218
($60,900 × 12% × 60 ÷ 360).
Aug. 1 Cash18,540
Notes Receivable18,000
Interest Revenue540
($18,000 × 9% × 120 ÷ 360).
Oct. 5 Accounts Receivable—Halloran Co. 13,500
Sales13,500
5 Cost of Merchandise Sold8,100
Merchandise Inventory8,100
15 Cash13,500
Accounts Receivable—Halloran Co.13,500