Question 1

On January 1, 2020, John Diego Company had accounts receivable:

Accounts receivable $146,000

Notes receivable 15,000

Allowance for doubtful accounts 13,200

The note receivable is from Trudy Borke Company. It is a 4-month, 12% note dated December 31, 2019.

John Diego Company prepares financial statements annually.

During the year, the following selected transactions occurred:

Jan 5 Sold merchandise on account to Jones Company, terms n/15 $18,000

Jan 20 Accepted Jones Company's note for balance due. 9% interest rate

3 months

Feb 18 Sold merchandise to Swan Company and accepted Swan's note for amount 8,000 Note value

due. 10% interest rate

6 months

Apr 20 Collected Jones Company note in full

Apr 30 Received payment in full from Trudy Borke Company on the amount due.

May 25 Accepted Avita Inc.'s note in settlement of a past due balance on account 6,000 Note value

8% interest rate

3 months

Aug 18 Received payment in full from Swan Company on note due.

Aug 25 The Avita Inc. note was dishonored. Avita Inc. is not bankrupt; future payment is anticipated.

Sep 1 Sold merchandise to Jose Trevino Company and accepted a note for payment 12,000 Note value

due. 10% interest rate

6 months

Instructions:

Journalize the transactions: