JOURNAL ENTRY OPTIONS

• Accounts payable
• Accounts receivable
• Allowance for doubtful accounts
• Bad debts expense
• Cash
• Cost of good sold
• Credit card expense
• Factoring fee expense
• Interest receivable
• Interest revenue
• Merchandise inventory
• Notes payable
• Sales
• Sales discounts

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Problem 7-4A Accounts receivable transactions and bad debts adjustments LO C1, P2, P3 Liang Company began operations in Year 1. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows. Year 1 a. Sold $1,349,300 of merchandise (that had cost $980,700) on credit, terms n/30. b. Wrote off $20,400 of uncollectible accounts receivable. c. Received $667,200 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 2.60% of accounts receivable would be uncollectible. Year 2 e. Sold $1,596,600 of merchandise (that had cost $1,318,800) on credit, terms n/30. f. Wrote off $26,100 of uncollectible accounts receivable. g. Received $1,145,400 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 2.60% of accounts receivable would be uncollectible. Required: Prepare journal entries to record Liang's Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar.) Complete this question by entering your answers in the tabs below. JE Year 1 JE Year 2 Prepare journal entries to record Liang's Year 1 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) View transaction list Journal entry worksheet Required: Prepare journal entries to record Liang's Year 1 and Year 2 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar.) Complete this question by entering your answers in the tabs below. JE Year 1 JE Year 2 Prepare journal entries to record Liang's Year 1 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) View transaction list Journal entry worksheet Sold $1,349,300 of merchandise on credit, terms n/30. Note: Enter debits before credits. Transaction General Journal Debit Credit a(1) Accounts payable Accounts receivable Allowance for doubtful accounts Bad debts expense Record en Cash View general journal