Question

The following selected transactions are from King Company.

Answer 1

Answer:

note receivable 13,200 debit

  account receivables 13,200 credit

--to record note acceptance--

interest receivable 132 debit

  interest revenue      132 credit

--to record interest--

cash   13,464 debit

    interest      receivable 132 credit

    note receivable      13,200 credit

   interest revenue           132 credit

--to record Clark note bein honored--

note receivables 18,000 debit

  account receivables 18,000 credit

note receivables 7,000 debit

  account receivables 7,000 credit

--to record note acceptance--

account receivables 7,105 debit

    note receivables      7,000 credit

  interest receivable           105 credit

account receivables 18,105 debit

    note receivables      18,000 credit

  interest receivable           105 credit

--to record dishonored notes--

note receivables 16,000 debit

  account receivables 16,000 credit

--to record note acceptance--

note receivables 17,400 debit

  account receivables 17,400 credit

--to record note acceptance--

cash         17,690 debit

     interest revenue 290 credit

     note receivable 17,400 credit

--to record Turner honor note--

cash               17,197 debit

    interest revenue      297 credit

   note receivable    16,900 credit

-- to record Taylor honoring the note--

allowance for doubtful account 18,105 debit

     account receivables                   1,105 credit

--to record Perez write-off--

Explanation:

Clark Note

13,200  x 12% x 1/12 = 132

Turner Note

17,400 x 10% x 2/12 = 290

Taylor Note

16,900 x 6% x 3/12 = 297

Walker

7,000 x 6% x 3/12 = 105

Perez account:

18,000 x 7% x 1/12 = 105