E 7-6 E 7-7

1. 1.
Journal
Date Account Debit Credit Date
7/15 Accounts Receivable 50,000 7/15
Sales Revenue 50,000
7/23 Cash 49,000 7/23
Sales Discount (50,000 x .02) 1,000
Accounts Receivable 50,000
2.
2.
Journal Date
Date Account Debit Credit 7/15
7/15 Accounts Receivable 50,000
Sales Revenue 50,000 7/23
7/23 Cash 50,000
Accounts Receivable 50,000

E 7-10 E 7-11
1. 1.
Bad Debt Expense for 2018 = $67,500
2. Date
Beginning Balance of Allowance for Uncollectible Accounts= 42,000
Add: Bad Debt Expense for 2018 = 67,500
Less: Ending Balance of Allowance for Uncollectible Accounts = (40,000)
Accounts Receivable Written Off = $69,500
3.
Using the Direct Write Off Method, the bad debt expense would be $69,500

2.
Accounts Receivable Net = $562
E 7-14
1. E 7-15
Journal 1.
Date Account Debit Credit
30-Jun Notes Receivable 30,000 Date
Sales Revenue 30,000 30-Jun
31-Dec Interest Receivable 900
Interest Expense 900
31-Mar Cash 31,350 31-Dec
Notes Receivable 30,000
Interest Receivable 900 31-Mar
Interest Revenue
2. 31-Mar
In 2018 the Income before taxes would be understated 900 dollars
In 2019 the income before taxes would be overstated 900 dollars
2.
 Journal
Account Debit Credit
Accounts Receivable (50,000 x .02) 49,000
Sales Revenue 49,000
Cash 49,000
Accounts Receivable 49,000

Journal
Account Debit Credit
Accounts Receivable 49,000
Sales Revenue 49,000
Cash 50,000
Accounts Receivable 49,000
Sales Discount Forfeited 1,000

Journal
Account Debit Credit
Allowance for Uncollectible Accounts 21,000
Accounts Receivable 21,000
Accounts Receivable 1,200
Allowance for Uncollectible Accounts 1,200
Bad Debts Expense (625,000 x .1 - 12,200) 50,300
Allowance for Uncollectible Accounts 50,300

counts Receivable Net = $562,500 (625,000 - 62,500)

Journal
Account Debit Credit
Notes Receivable 30,000
Sales Revenue 28,200
Discount on Notes Receivable (30,000 x .08 x 9/12) 1,800
Discount on Note Receivable (30,000 x .08 x 6/12) 1,200
Interest Revenue 1,200
Discount on Note Receivable (30,000 x .08 x 3/12) 600
Interest Revenue 600
Cash 30,000
Notes Receivable 30,000

Interest Amount (9 months) / Sales Revenue 6.38%