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P8-29A Accounting for uncollectible accounts (aging of accounts method, card sales, notes receivable, and accrued interest revenue [20-30 min]

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 uncollectable 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.

Requirement:

1. Record the transactions in the journal of Relaxing Recliner Chairs. Explanations are not required. ( for notes stated in days, used a 360-day year. Round to the nearest dollar).