Question

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., $29,400. The cost of merchandise sold was $17,640. Mar. 18 Accepted a 60-day, 6% note for $29,400 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 $15,700. The cost of merchandise sold was $9,420. 21 Loaned $6,000 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., $60,000. The cost of merchandise sold was $36,000. Oct. 14 Accepted a 60-day, 6% note for $60,000 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 15 days at 12% computed on the maturity value of the note. Required: Journalize the entries to record the transactions. Assume 360 days in a year. If an amount box does not require an entry, leave it blank.Jan. 21-sale Jan. 21-cost Mar. 18 May 17 June 15-sale June 15-cost June 21 June 25 July 21 Sept. 19- note Sept. 22-sale Sept. 22-cost Oct. 14 Nov. 13 Dec. 28

Answer 1

The journal entries for the transactions by Danix co during the year, using a 360-day year are as follows:

Jan. 21 Debit Accounts Receivable (Black Tie Co.) $29,400

Credit Sales Revenue $29,400

Debit Cost of Goods Sold $17,640

Credit Inventory $17,640

Mar. 18 Debit Note Receivable (Black Tie Co.) $29,400

Credit Accounts Receivable (Black Tie Co.) $29,400

60-day, 6% note

May 17 Debit Cash $29,694

Credit Note Receivable (Black Tie Co.) $29,400

Credit Interest Revenue $294

June 15 Debit Accounts Receivable (Pioneer Co.) $15,700

Credit Sales Revenue $15,700

Debit Cost of Goods Sold $9,420

Credit Inventory $9,420

June 21 Debit 8% Note Receivable (JR Stutts) $6,000

Credit Cash $6,000

a 30-day, 8% note.

June 25 Debit Cash $15,700

Credit Accounts Receivable (Pioneer Co.) $15,700

July 21 Debit Cash $40

Credit Interest Revenue $40 ($6,000 x 8% x 30/360)

9% Note Receivable (JR Stutts) $6,000

Credit 8% Note Receivable (JR Stutts) $6,000

To record the exchange with a 60-day, 9% note.

Sept. 19 Debit Cash $6,090

Credit 9% Note Receivable (JR Stutts) $6,000

Credit Interest Revenue $90

($6,000 x 9% x 60/360)

Sept. 22 Debit Accounts Receivable (Wycoff Co.) $60,000

Credit Sales Revenue $60,000

Debit Cost of Goods Sold $36,000

Credit Inventory $36,000

Oct. 14 Debit 6% Note Receivable (Wycoff Co.) $60,000

Credit Accounts Receivable (Wycoff Co.) $60,000

Accepted a 60-day, 6%

Dec. 13 Debit Accounts Receivable (Wycoff Co.) $60,600

Credit Interest Receivable $600

Credit 6% Note Receivable (Wycoff Co.) $60,000

Dec. 28 Debit Cash $60,903

Credit Interest Receivable $600

Credit Accounts Receivable (Wycoff Co.) $60,600

Credit Interest Revenue $303

($60,600 x 12% x 15/360) interest for 15 days at 12% computed on the maturity value of the note.

Data Analysis:

Jan. 21 Accounts Receivable (Black Tie Co.) $29,400 Sales Revenue $29,400

Cost of Goods Sold $17,640 Inventory $17,640

Mar. 18 Note Receivable (Black Tie Co.) $29,400 Accounts Receivable (Black Tie Co.) $29,400 60-day, 6% note

May 17 Cash $29,694 Note Receivable (Black Tie Co.) $29,400 Interest Revenue $294

June 15 Accounts Receivable (Pioneer Co.) $15,700 Sales Revenue $15,700 Cost of Goods Sold $9,420 Inventory $9,420

June 21 8% Note Receivable (JR Stutts) $6,000 Cash $6,000 a 30-day, 8% note.

June 25 Cash $15,700 Accounts Receivable (Pioneer Co.) $15,700

July 21 Cash $40 Interest Revenue $40 ($6,000 x 8% x 30/360)

9% Note Receivable (JR Stutts) $6,000 8% Note Receivable (JR Stutts) $6,000

60-day, 9% note

Sept. 19 Cash $6,090 9% Note Receivable (JR Stutts) $6,000 Interest Revenue $90 ($6,000 x 9% x 60/360)

Sept. 22 Accounts Receivable (Wycoff Co.) $60,000 Sales Revenue $60,000

Cost of Goods Sold $36,000 Inventory $36,000

Oct. 14 6% Note Receivable (Wycoff Co.) $60,000 Accounts Receivable (Wycoff Co.) $60,000

Accepted a 60-day, 6%

Dec. 13 Accounts Receivable (Wycoff Co.) $60,600 Interest Receivable $600 6% Note Receivable (Wycoff Co.) $60,000

Dec. 28 Cash $60,903 Interest Receivable $600 Accounts Receivable (Wycoff Co.) $60,600Interest Revenue $303 ($60,600 x 12% x 15/360) interest for 15 days at 12% computed on the maturity value of the note.

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