Notes Receivable

Harrigan Enterprises utilizes Snoopy Systems to design and implement a cash management system. Due to Harrigans cash management problems, it cannot currently pay for the system out of pocket. Snoopy chooses to extend a 6% note on January 1 for the $27,000 project cost.

Required:

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1. Prepare Snoopys journal entry to record the service performed on January 1. If an amount box does not require an entry, leave it blank.

blank	CashAccounts ReceivableNotes PayableNotes ReceivableSales Revenue	- Select -	- Select -
	Accounts ReceivableCashNotes ReceivableSales DiscountsSales Revenue	- Select -	- Select -
	(Record sale with note)

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2. Determine how much interest Snoopy will receive if the note is repaid on May 1. $fill in the blank dc2d3a0d6feaf87_1

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3. Provide Snoopys journal entry to record the cash received to pay off the note and interest on May 1. If an amount box does not require an entry, leave it blank.

blank	CashInterest IncomeInterest ReceivableNotes PayableNotes Receivable	- Select -	- Select -
	CashInterest ExpenseInterest IncomeInterest PayableInterest Receivable	- Select -	- Select -
	Accounts ReceivableCashNotes PayableNotes ReceivableSales Revenue	- Select -	- Select -
	(Record collection of note plus interest)

Section 2

Average Uncollectible Account Losses and Bad Debt Expense

The accountant for Volunteer Company prepared the following data for sales and losses from uncollectible accounts:

Year	Credit Sales		Losses from Uncollectible Accounts*
2019	$883,000		$13,125
2020	952,000		14,840
2021	1,083,000		16,790
2022	1,189,000		16,850
*Losses from uncollectible accounts are the actual losses related to sales of that year (rather than write-offs of that year).

Required:

1. Calculate the average percentage of losses from uncollectible accounts for 2019 through 2022. Enter your answer as a percent, rounded to one decimal place. fill in the blank 1%

2. Assume that the credit sales for 2023 are $1,260,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of losses from uncollectible accounts for 2023 credit sales. Determine the bad debt expense for 2023 using the percentage of credit sales method. $fill in the blank 2