148. The following series of transactions occurred during 2014and 2015when Linwood Co. sold merchandise to John Moore. Linwood's annual accounting period ends on December 31.
10/01/14
Sold $12,000 of merchandise to John Moore, terms 2/10, n/30.
11/15/14
Moore reports that he cannot pay the account until early next year. He agrees to exchange the account for a 120-day,12% note receivable.
12/31/14
Prepared the adjusting journal entry to record accrued interest on the note.
03/15/15
Linwood receives a check from Moore for the maturity value (with interest) of the note.
03/22/15
Linwood receives notification that Moore’s check is being returned for non-sufficient funds (NSF).
12/31/15
Linwood writes off Moore’s account as uncollectible.
Prepare Linwood Co.'s journal entries to record the above transactions assuming they use the allowance method of accounting for uncollectible accounts.
149. Prepare general journal entries for the following transactions of Viking Company, assuming they use the allowance method to account for uncollectible accounts.
Apr
1
Sold $2,500 of merchandise to Arthur Co., receiving an 8%, 90-day, $2,500 note.
15
Wrote off $1,500 owed by Network Co.
30
Received a $6,000, 5%, 30-day note receivable from Calvin Co. as exchange for its $6,000 account receivable.
May
The note received from Calvin on April 30 was collected in full.
June
Arthur Co. was unable to pay the note on the due date.
July
Network Co. paid $1,000 of the amount written off on April 15.
150. Cairo Co. uses the allowance method of accounting for uncollectible accounts. Cairo Co. accepted a $5,000, 12%, 90-day note dated May 16, from Alexandria Co. in exchange for its past-due account receivable. Make the necessary general journal entries for Cairo Co. on May 16 and the August 14 maturity date, assuming that the:
a. Note is held until maturity and collected in full at that time.
b. Note is dishonored; the amount of the note and its interest are written off as uncollectible.
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