Question

Journalize all transactions for Jo Jo Music. Round all amounts to the nearest dollar. (For notes stated in days, use a 360-day year.) (Round your final answers to the nearest whole dollar. Record debits first, then credits. Exclude explanations from journal entries.)

Dec. 6 Received a $ 9,000?, 90?-day, 12?%note in settlement of an overdue accounts receivable from Concord Sounds.

Dec. 31: Made an adjusting entry to accrue interest on theConcord Sounds note.

Dec 31: Made a closing entry for interest revenue.

Mar.6: Collected the maturity value of the Concord Sounds note. (Prepare a single compound journal entry.)

Jun. 30: Loaned $ 11,000 cash to Main Street Music, receiving a six-month, 12% note.

Oct. 2: Received a $ 9,000, 60-day,12% note for a sale to Salem Sounds. Ignore Cost of Goods Sold.

Dec. 1: Salem Sounds dishonored its note at maturity. (Prepare a single compound journal entry.)

Dec. 1: Wrote off the receivable associated with Salem Sounds. (Use the allowance method.)

Dec. 30: Collected the maturity value of the Main Street Music note. (Prepare a single compound journal entry.)

Answer 1

Answer: Please refer to Explanation

Explanation:

The following is a compound journal. I shall record the accounts that need to be debited first and then the account to be credited.

Dec 6

DR Notes Receivable - Concord Sounds $9,000

CR Accounts Receivable - Concord Sounds $9,000

(To record note received as settlement)

Dec 31

DR Interest Receivable (9,000 * 12% * ((25 days since Dec 6)/360) $ 75

CR Interest Revenue $75

(To record accrued interest)

Dec 31

DR Interest Revenue $75

CR Cash $75

(To record closing entry on interest revenue)

Mar 6

DR Cash $9,270

CR Notes Receivable - Concord Sounds $9,000

CR Interest Receivable $75

CR Interest Revenue (9,000 * 12% * 65/360) $195

(To record Collected note)

Jun 30

DR Notes Receivable - Main Street Music $11,000

CR Cash $11,000

(To record Note Received)

Oct 2

DR Notes Receivable - Salem Sounds $9,000

CR Sales Revenue - Salem Sounds $9,000

(To record Note Received)

Dec 1

DR Accounts receivable - Salem Sounds $9,180

CR Notes Receivable $9,000

CR Interest Receivable (9,000 * 12% * 60/360) $180

Dec 1

DR Allowance for Bad Debt $9,180

CR Accounts Receivable - Salem Sounds $9,180

(To record receivable written off)

Dec 30

DR Cash $11,660

CR Notes Receivable - Main street Music $11,000

CR Interest Revenue (11,000* 12% * ( 6 months / 12) ) $660

(To record collection of Note - MS)