Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income 2016 Aug. 10 Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income 2016 Dec. 1 Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income 2017 Jan. 31 111 2. Which of the following is true in regards to Baxter sending in a partial payment with the remaining balance owed through a formal note? a. Baxter needed to do this to avoid bankruptcy. b. Baxter wanted to reestablish a good credit standing with its suppliers. c. The bank forced Baxter to fulfill all its debt obligations. d. Baxter could not bear the guilt of nonpayment. Accounts and Notes Receivable Lenox Corp. sold merchandise for $5,700 to M. Baxter on May 15, 2016, with payment due in 44 days. Subsequent to this, Baxter experienced cash-flow problems and was unable to pay its debt. On August 10, 2016, Lenox stopped trying to collect the outstanding receivable from Baxter and wrote off the account as uncollectible. On December 1, 2016, Baxter sent Lenox a check for $1,300 and offered to sign a two-month, 12%, $4,400 promissory note to satisfy the remaining obligation. Baxter paid the entire amount due Lenox, with interest, on January 31, 2017. Lenox ends its accounting year on December 31 each year and uses the allowance method to account for bad debts. Required: 1. Prepare all of the necessary journal entries on the books of Lenox Corp. from May 15, 2016, to January 31, 2017. Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. Journal Balance Sheet Income Statement Stockholders' Net Date Description Debit Credit Assets Liabilities Equity Revenues Expenses Income 2016 May 15