Weldon Corporations fiscal year ends December 31. The following is a list of transactions involving receivables that

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Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2021:

Mar. 17 Accounts receivable of $1,700 were written off as uncollectible. The company uses the allowance method.
30 Loaned an officer of the company $20,000 and received a note requiring principal and interest at 7% to be paid on March 30, 2022.
May 30 Discounted the $20,000 note at a local bank. The bank’s discount rate is 8%. The note was discounted without recourse and the sale criteria are met.
June 30 Sold merchandise to the Blankenship Company for $12,000. Terms of the sale are 2/10, n/30. Weldon uses the gross method to account for cash discounts.
July 8 The Blankenship Company paid its account in full.
Aug. 31 Sold stock in a nonpublic company with a book value of $5,000 and accepted a $6,000 noninterestbearing note with a discount rate of 8%. The $6,000 payment is due on February 28, 2022. The stock has no ready market value.
Dec. 31 Weldon estimates that the allowance for uncollectible accounts should have a balance in it at year-end equal to 2% of the gross accounts receivable balance of $700,000. The allowance had a balance of $12,000 at the start of 2021.


Required:
1. Prepare journal entries for each of the above transactions (round all calculations to the nearest dollar).
2. Prepare any additional year-end adjusting entries indicated.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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Intermediate Accounting

ISBN: 978-1260481952

10th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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