Exercise 7-11A (Algo) Accounting for notes receivable LO 7.5 Rainey Enterprises loaned $40,000 to Small Company on June 1, Year 1, for one year at 9 percent interest. Required a. Record these general journal entries for Rainey Enterprises: (1) The loan to Small Company. (2) The adjusting entry at December 31, Year 1 (3) The adjusting entry and collection of the note on June 1, Year 2 . b. Show the effects of the three given transactions in a horizontal statements model, Complete this question by entering your answers in the tabs below. Show the effects of the three given transactions in a horizontal statements model. (In the Statement of Cash Flows column, use the initials OA to activity, FA for financing activity, and leave blank to indicate the element is not affected by the event. Enter any decreases to account balances ar final answers to the nearest whole dollar.) Complete this question by entering your answers in the tabs below. Record these general joumal entries for Rainey Enterprises: (If no entry is required for a transaction/event, seiect Tio joumal eftry required in the first account fleld, Round your final answers to the nearest whole dollar.) (1) The loan to Small Company. (2) The adjusting entry at December 31 , Year 1 (3) The adjusting entry and collection of the note on June 1, Year 2 . Exercise 7-5A (Algo) Analyzing financial statement effects of accounting for uncollectible accounts using the percent of revenue allowance method LO 7-1 Grover Incorporated uses the allowance method to account for uncollectible accounts expense. Grover Incorporated experienced the following four accounting events in Year 1 : 1. Recognized $83,000 of revenue on account. 2. Collected $77,000 cash from accounts recelvable. 3. Wrote off uncollectible accounts of $1,250. 4. Recognized uncollectible accounts expense Grover estimated that uncollectible accounts expense will be 3 percent of sales on account. Required a. Show the effect of each event on the elements of the financial statements, using a horizontal statements model. Use + for increase. - for decrease, and blank for not affected, In the Statement of Cash Flows column, indicate whether the item is an operating activit) (OA), investing activity (IA), financing activity (FA), or not affected (biank). The first transaction is entered as an example. b. Record the previous transactions in general journal form. Complete this question by entering your answers in the tabs below. Record the previous transactions in general journal form, (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Complete this question by entering your answers in the tabs below. Show the effect of each event on the elements of the financial statements, using a horizontal statements model. Use + for increase, - for decrease, and blank for not affected. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), inverting activity (IA), financing activity (FA), or not affected (blank). The first transaction is entered as an example
