Weldon Corporation’s fiscal year ends December 31. The followingis a list of transactions involving receivables that occurredduring 2021:
Mar. | | 17 | | Accounts receivable of $2,200 were written off asuncollectible. The company uses the allowance method. |
| | 30 | | Loaned an officer of the company $27,000 and received a noterequiring principal and interest at 8% to be paid on March 30,2022. |
May | | 30 | | Discounted the $27,000 note at a local bank. The bank’sdiscount rate is 9%. The note was discounted without recourse andthe sale criteria are met. |
June | | 30 | | Sold merchandise to the Blankenship Company for $17,000. Termsof the sale are 3/10, n/30. Weldon uses the gross method to accountfor cash discounts. |
July | | 8 | | The Blankenship Company paid its account in full. |
Aug. | | 31 | | Sold stock in a nonpublic company with a book value of $5,500and accepted a $7,000 noninterest-bearing note with a discount rateof 9%. The $7,000 payment is due on February 28, 2022. The stockhas no ready market value. |
Dec. | | 31 | | Weldon estimates that the allowance for uncollectible accountsshould have a balance in it at year-end equal to 2% of the grossaccounts receivable balance of $840,000. The allowance had abalance of $17,000 at the start of 2021. |
Required:
Prepare journal entries for each of the above transactions andadditional year-end adjusting entries indicated. (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field. Do not round intermediatecalculations and round your final answers to nearest wholedollar.)
4. Record the cash received on the discountednote.
6. The Blankenship Company paid its account infull.
7. Sold stock with a book value of $5,500 andaccepted a $7,000 noninterest-bearing note with a discount rate of9% due on February 28, 2022.
8. To record the accrual of interest earned onnote receivable.
9. To record the accrual of bad debtexpense.