I. The following accounts receivable activities of Vandalay Industries occurred during Year 2. Prepare the journal entries required. a. Vandalay recorded $300,000 of sales; all sales are on account.

b. After many collection attempts, Vandalay determined $10,000 of accounts receivable from Pendant Publishing to be uncollectible and wrote-off this account (allowance method is used)

II. Vandelay Industries reported total credit sales of $300,000 in Year 2. Managements aging of accounts receivable and estimates of uncollectible accounts at December 31, Year 2 are provided below:

Customer

Totals Estimated Percentage

Total $262,000

Number of Days Unpaid 0-30 30-60 60-90 $142,000 $40,000 $32,000 2% 4% 8%

Over 90 $48,000 20%

Vandalays allowance for doubtful accounts had an unadjusted credit balance of $12,000 at December 31, Year 2. Prepare the year-end adjusting journal entry to record bad debt expense (using the aging of accounts receivable method).

III. Vandelay Industries reported total credit sales of $300,000 in Year 2. Based on prior experience, management estimates that 2.5% of credit sales will be uncollectible. At December 31, Year 2, the companys allowance for doubtful accounts had an unadjusted credit balance of $12,000. Prepare the year-end adjusting journal entry to record bad debt expense (using the percentage of credit sales method).

IV. On April 1, Year 1, Vandelay Industries loans $10,000 to a customer opening a new store. The note, which bears 9% annual interest, becomes due on March 31, Year 2. a. Prepare the journal entry required to record the issuance of the note.

b. Prepare the adjusting journal entry required at December 31, Year 1 to accrue the interest.