Chapter 8 1. Journal entries Prepare journal entries to record the following transactions entered by the Castagno Company: 20x1 Nov 1 Sold merchandise on account to Mercer, Inc., for $18,000, terms 2/10, n/30. 5 Mercer, Inc., retumed merchandise worth $1,000. 9 Received payment in full from Mercer, Inc. 2. Allowance for Doubtful Accounts The ledger of the Ramirez Company at the end of the current year (Dec 31, 20x1), shows Accounts Receivable of $200,000. Instructions (a) If Allowance for Doubtful Accounts has a credit balance of $3,000 in the trial balance and bad debts are expected to be 8% of accounts receivable, loumalize the adjusting entry for the end of the period. (Show all calculations.) (b) if Allowance for Doubtful Accounts has a debit balance of $3,000 in the trial balance and bad debts are expected to be 8% of accounts receivable, journalize the adjusting entry for the end of the period. (Show all calculations.) 3. Notes Receivable These transactions took place for Sanders Co. 20x1 May 1 Received a $15,000, 1-year, 9% note in exchange for an outstanding account receivable from T. Foley Dec. 31 Accrued interest revenue on the T. Foley note. 20x2 May 1 Received principal plus interest on the T. Foley note. Instructions Record the transactions in general journal