Problem 7 : P8-31A

Background:

Sleepy Recliner Chairs completed the transactions listed in the Transactions section below related to receivables during its fiscal year.

Assignment:

1) Using the General Journal tab, click Add Transaction to journalize each transaction. Click Post Transaction once you complete the entry, then repeat these steps for each transaction. Round any calculations to the nearest dollar.

2) Click the Reports tab and review the results of recording these transactions on the General Ledger.

3) Click Submit Work when complete.

Transactions:

07/01/2018

Sold merchandise inventory to Stan-Mart, receiving a $41,000, nine-month, 8% note. Ignore Cost of Goods Sold.

08/01/2018

Sold merchandise to Appeal Company, receiving a 60-day, 6% note for $7,000. Ignore Cost of Goods Sold.

09/30/2018

Appeal Company dishonored its note at maturity. The business converted the maturity value of the note to an accounts receivable.

04/01/2019

Collected the maturity value of the Stan-Mart note.

05/16/2019

Loaned $17,000 cash to Crosby, Inc., receiving a 90-day, 16% note.

06/01/2019

Collected in full on account from Appeal Company.

06/30/2019

Accrued interest on the Crosby, Inc. note.

06/30/2019

Made an adjusting entry to record bad debts expense base on an aging of accounts receivable. The aging schedule shows that $13,800 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in Allowance for Bad Debts was $11,800.

10100	Cash	Current Asset
10400	Accounts Receivable	Current Asset
10450	Allowance for Bad Debts	Contra-Asset
10500	Notes Receivable	Current Asset
10550	Interest Receivable	Current Asset
10600	Merchandise Inventory	Current Asset
10650	Supplies	Current Asset
20100	Accounts Payable	Current Liability
20150	Notes Payable	Current Liability
20200	Interest Payable	Current Liability
30500	Common Stock	Stockholders' Equity
30700	Retained Earnings	Stockholders' Equity
40100	Sales Revenue	Sales Revenue
40250	Service Revenue	Service Revenue
50100	Cost of Goods Sold	Cost of Goods Sold
50400	Wages Expense	Operating Expense
50550	Bad Debts Expense	Operating Expense
50700	Supplies Expense	Operating Expense
60100	Interest Revenue	Other Revenue
70100	Interest Expense	Other Expense