Question

On January 1, 2017, Sheridan Company had Accounts Receivable of $57,400 and Allowance for Doubtful Accounts of $3,400. Sheridan Company prepares financial statements annually. During the year, the following selected transactions occurred.

Jan. 5 Sold $4,500 of merchandise to Rian Company, terms n/30.
Feb. 2 Accepted a $4,500, 4-month, 10% promissory note from Rian Company for balance due.
12 Sold $10,000 of merchandise to Cato Company and accepted Cato’s $10,000, 2-month, 9% note for the balance due.
26 Sold $11,900 of merchandise to Malcolm Co., terms n/10.
Apr. 5 Accepted a $11,900, 3-month, 8% note from Malcolm Co. for balance due.
12 Collected Cato Company note in full.
June 2 Collected Rian Company note in full.
15 Sold $2,000 of merchandise to Gerri Inc. and accepted a $2,000, 6-month, 11% note for the amount due.

Journalize the transactions. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Answer:

Following are the generalized transactions, and only general entries are recorded

Explanation

1. On jan, 5 sold merchandise to Rian company for $4500

Accounts Receivable are debited by  4,500  

Sales are credited by  4,500

2. Feb. 2 accepted a $4,500, 4-month, 10% promissory note from Rian Company for the balance due.

Notes Receivable are debited by  4,500  

Accounts Receivable are credited by 4,500

3. 12 sold $10,000 of merchandise to Cato Company and accepted Cato's $10,000, 2-month, 9% note for the balance due.

Notes Receivable are debited by 10,000  

Sales are credited by 10,000

4. 26 Sold $11,900 of merchandise to Malcolm Co., terms n/10.

Accounts Receivable are debited by 11,900  

Sales are credited by 11,900

5. Apr. 5 accepted an $11,900, 3-month, 8% notes from Malcolm Co. for balance due.

Notes Receivable are debited by  11,900  

Accounts Receivable are credited by 11,900

6. 12 collected Cato Company note in full.

Cash is debited by 10,150  

Interest Income is credited by 150

Notes Receivable are credited by 10,000

7. June 2 collected Rian Company note in full.

Cash is debited by  4,650  

Interest Income is credited by 150

Notes Receivable is credited by 4,500

8. 15 sold $2,000 of merchandise to Gerri Inc. and accepted a $2,000, 6-month, 11% notes for the amount due.

Notes Receivable is debited by 2,000  

Sales are credited by 2,000

Note: Aforementioned entries are also shown in T-account format in the attached word file.