Bonavista Outdoors Store sells on account. When a customer account becomes three months old, Bonavista Outdoors Store converts the account to a note receivable and immediately discounts the note to a bank. During 2014, Bonavista Outdoors Store completed these transactions:
May 29 Sold goods on account to Raj Diwali, $9,600.
Sept. 1 Received an $8,000, 60-day, 8 percent note and cash of $1,600 from Raj Diwali in satisfaction of his past-due account receivable.
1 Sold the Diwali note by discounting it to a bank for proceeds of $7,440.
Required
Record the transactions in Bonavista Outdoors Store's journal.