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Journalize the following transactions in the accounts of Simmons Company:

a.Mar 1 Received a $60,000, 60-day, 6% note dated March 1 from Bynum Company on account.
b.Mar 18 Received a $25,000, 60-day, 9% note dated March 18 from Solo Company on account.
c.Apr. 30 The note dated March 1 from Bynum Company is dishonored, and the customer’s account is charged for the note, including interest.
d.May 17 The note dated March 18 from Solo Company is dishonored, and the customer’s account is charged for the note, including interest.
e.July 29 Cash is received for the amount due on the dishonored note dated March 1 plus interest for 90 days at 8% on the total amount debited to Bynum Company on April 30.
f.Aug. 23 Wrote off against the allowance account the amount charged to Solo Company on May 17 for the dishonored note dated March 18.

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Answer:

A) March 1, received note receivable from Bynum Company

Dr Note receivable 60,000

    Cr Accounts receivable 60,000

B) March 16, received note receivable from Solo Company

Dr Note receivable 25,000

    Cr Accounts receivable 25,000

C) April 30, Bynum Company's note is dishonored

Dr Accounts receivable 60,600

     Cr Notes receivable 60,000

     Cr Interest revenue 600 ($60,000 x 6% x 2/12)

D) May 17, Solo Company's note is dishonored

Dr Accounts receivable 25,375

     Cr Notes receivable 25,000

     Cr Interest revenue 375 ($25,000 x 9% x 2/12)

E) July 29, cash is collected from Byrum Company

Dr Cash 60,900

    Cr Accounts receivable 60,600

    Cr Interest revenue 300

F) July 29, Solo Company's debt is written off

Dr Allowance for doubtful accounts  25,375

    Cr Accounts receivable 25,375  

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