Hiroole Supply Corp. has the following selected transactions for notes receivable.
Nov. 1
Lent $114,000 cash to A. Bouchard on a one-year, 9% note.
Dec. 1
Sold goods to Wright, Inc., receiving a two-month, 6%, $22,500 note. The goods cost $12,600.
15
Received a six-month, 6%, $24,400 note in exchange for an account from Aquilina Corporation.
Feb. 1
Collected the amount owing on the Wright note.
28
Accrued interest on all notes receivable at year end. Interest is calculated to the nearest half month and is due at maturity.
28
Analyzed each note and estimated that uncollectible notes at year end totalled $18,100
Record the above transactions for Hiroole Supply Corp
To record the above transactions for Hiroole Supply Corp., you would need to follow these steps:
1. Open the general journal, which is the book where all the company's transactions are recorded.
2. Record the first transaction on November 1:
- Debit Notes Receivable - A. Bouchard: $114,000
- Credit Cash: $114,000
3. Record the second transaction on December 1:
- Debit Notes Receivable - Wright, Inc.: $22,500
- Credit Sales: $22,500
- Debit Cost of Goods Sold: $12,600
- Credit Inventory: $12,600
4. Record the third transaction on December 15:
- Debit Notes Receivable - Aquilina Corporation: $24,400
- Credit Accounts Receivable: $24,400
5. Record the fourth transaction on February 1:
- Debit Cash: $22,755 ($22,500 principal + $255 interest)
- Credit Notes Receivable - Wright, Inc.: $22,500
- Credit Interest Revenue: $255
6. Record the fifth transaction on February 28:
- Debit Bad Debt Expense: $18,100
- Credit Allowance for Doubtful Accounts: $18,100
7. Record the sixth transaction on February 28:
- Debit Interest Receivable: (interest amounts for each note)
- Credit Interest Revenue: (interest amounts for each note)
Remember to adjust the interest receivable and interest revenue accounts based on the accruing interest and year-end calculations for each note.
Please note that these are general guidelines, and it is recommended to consult with an accountant or follow specific accounting standards and practices applicable to your jurisdiction or company.