relaxing recliner chairs completed the following selected transactions 492114

Accounting for uncollectible accounts (aging of accounts method, card sales, notes receivable, and accrued interest revenue

Relaxing Recliner Chairs completed the following selected transactions:

2011

Jul 1 : Sold inventory to Great-Mart, receiving a $45,000, nine-month 12% note, Ignore cost of goods sold.

Oct 31: Recorded credit-and debit-card sales for the period of 21,000.

Nov 3: Card processor drafted company’s checking account for processing fee of $410.

Dec 31: Made an adjusting entry to accrue interest on Great-Mart note

31: Made an Adjusting entry to record uncollectible account expense based on an aging of accounts receivable. The aging schedule shows that $15,200 of accounts receivable will not be collected. Prior to this adjustment, the credit balance in allowance for uncollectible accounts is $11,600.

2012

Apr 1: Collected the Maturity Value of the Great-Mart note.

June 23: Sold Merchandise to Ambiance, Corp., receiving a 60-day, 9% note for $13,000.

Ignore cost of goods sold.

Aug 22: Ambiance, Corp., dishonored its note (failed to pay) at maturity; we converted the maturity value of the note to an account receivable.

Nov 16 : Loaned $21,000 cash to Creed, Inc, receiving a 90-day, 8% note.

Dec 5 : Collected in full on account from Ambiance, Corp.

31: Accrued the interest on the Creek, Inc, note.