Q2: Scarlet Systems, Inc. (SS) developed an ERP software for Johnson Tools, LLC (IT) for $300,000 due within 30 days of successful testing of the system. Testing was completed on 30 April and the...

Q2: Scarlet Systems, Inc. (SS) developed an ERP software for Johnson Tools, LLC (IT) for $300,000 due within 30 days of successful testing of the system. Testing was completed on 30 April and the software became operational. JT paid an amount of $120,000 on 15 May. JT had to settle another large liability in April which resulted in it not being able to pay the remaining invoice amount (i.e. $180,000) by 30 May. On 1 June, JT CFO convinced SS finance team to accept a note receivable due within 60 days carrying interest rate of 5% per annum for the remaining outstanding balance. JT paid the interest and principal of the note receivable at its maturity Required: Journalize the transactions.


Extracted text: Q 2 : Scarlet Systems, Inc. (SS) developed an ERP software for Johnson Tools, LLC (JT) for $300,000 due within 30 days of successful testing of the system. Testing was completed on 30 April and the software became operational. JT paid an amount of $120,000 on 15 May. JT had to settle another large liability in April which resulted in it not being able to pay the remaining invoice amount (i.e. $180,000) by 30 May. On 1 June, JT CFO convinced SS finance team to accept a note receivable due within 60 days carrying interest rate of 5% per annum for the remaining outstanding balance. JT paid the interest and principal of the note receivable at its maturity. Required: Journalize the transactions.