Requlred Information PA8-4 (Algo) Accounting for Accounts and Notes Receivable Transactions [LO 8-2, LO 8-3] [The following information applies to the questions displayed below.] Web WIzard, Incorporated, has provided Information technology services for several years. For the first two months of the current year, the company has used the percentage of credit sales method to estimate bad debts. At the end of the first. quarter, the company switched to the aging of accounts recelvable method. The company entered Into the following partial list of transactions during the first quarter. a. During January, the company provided services for $50,000 on credit. b. On January 31 , the company estimated bad debts using 1 percent of credit sales. c. On February 4 , the company collected $25,000 of accounts recelvable. d. On February 15, the company wrote off $150 account recelvable. e. During February, the company provided services for $40,000 on credit. f. On February 28 , the company estimated bad debts using 1 percent of credit sales. g. On March 1, the company loaned $2,200 to an employee, who signed a 6% note, due in 6 months. h. On March 15, the company collected $150 on the account written off one month earlier. 1. On March 31, the company accrued Interest earned on the note. J. On March 31, the company adjusted for uncollectlble accounts, based on the following aging analysis, which includes the preceding transactions (as well as others not listed). Prior to the adjustment, Allowance for Doubtful Accounts has an unadjusted credit balance of $1,300. A8-4 (Algo) Part 2 Prepare the journal entrles for Items (a) to (l). (If no entry Is required for a transaction/event, select "No Journal Entry Required" In the flrst account fleld. Do not round Intermedlate calculations.) Prepare the Journal entrles for Items (a) to (l). (If no entry Is required for a transaction/event, select "No Journal Entry Required" In the flrst account fleld. Do not round Intermedlate calculations.) Journal entry worksheet Record service revenue of $50,000 sold on account during January. Note: Enter debits before credits. Journal entry worksheet Record the adjusting entry for bad debts as of January 31 using 1 percent of credit sales. Note: Enter debits before credits. Journal entry worksheet Record the collection of $25,000 of outstanding accounts receivables on February 4. Note: Enter debits before credits. Journal entry worksheet 1 7 Record the write-off of a $150 account receivable on February 15. Note: Enter debits before credits. Journal entry worksheet 1 8 Record service revenue of $40,000 provided on account during February. Note: Enter debits before credits. Journal entry worksheet Record the adjusting entry for bad debts as of February 28 using 1 percent of credit sales. Note: Enter debits before credits. Journal entry worksheet 1 8 Record the receipt of a note on March 1 for a $2,200 loan to an employee. Note: Enter debits before credits. Journal entry worksheet Record the reversal of a $150 account receivable previously written off one month earlier. Note: Enter debits before credits. Journal entry worksheet 147 Record the receipt of cash of $150 from the customer. Note: Enter debits before credits. Journal entry worksheet
