E9.

2/

Date Account Titles Debit Credit

Mar.1 Accounts Receivable 5,000
Sales Revenue 5,000
Mar.5 Sales Returns and Allowances 500
Accounts Receivable 500
Mar.9 Cash 4,900
(5,000-100)
Sales Discount 100
(5,000x2%)
Accounts Receivable 5,000
Mar.1 Accounts Receivable 400
5
Sales Revenue 400
Mar.2 Accounts Recievable 6
1
Interest Revenue 6
($400x1.5%)

E9.3/

Date Account Titles Debit Credit

Jan.6 Accounts Receivable-Pryor Inc 7,000
Sales Revenue 7,000
Jan.16 Cash 6,860
Sales Discount 140
(7,000 x 2%)
Accounts Receivable-Pryor Inc 7,000

Paltrow Co.

Date Account Titles Debit Credit

Jan.10 Accounts Receivable-Andrew 9,000
Sales Revenue 9,000
Feb.12 Cash 5,000
Accounts Receivable-Andrew 5,000
Mar.1 Accounts Receivable-Andrew 40
0
Interest revenue [(9,000-5,000)x 1%] 40

E9.4/

(a)

Date Account Titles Debit Credit

 Accounts Receivable 800,000
Sales Revenue 800,000
Cash 763,000
Accounts Receivable 763,000

(b)

Date Account Titles Debit Credit

Allowance for Doubtful Accounts 7,300
Accounts Receivable 7,300

(c)

Date Account Titles Debit Credit

Accounts Receivable 3,100
Allowance for Doubtful Accounts 3,100
Cash 3,100
Accounts Receivable 3,100

(d)

Date Account Titles Debit Credit

Bad Debts Expense 19,400
Allowance for Doubtful Accounts 19,400
(9,000 + 3,100 + 7,300)

E9.5/

(a)

Date Account Titles Debit Credit

Dec.31 Bad Debt Expense 1,400
(9,400 – 8,000)
Accounts Receivable 1,400
(b)

Date Account Titles Debit Credit

(1)Dec.3 Bad Debts Expense 8,200
1 [(840,000 – 20,000)x1%]
Allowancefor Doubtful Accounts 8,200
(2)Dec.3 Bad Debts Expense 8,900
1 [(110,000 x 10%) – 2,100)
Allowance for Doubtful Accounts 8,900
(c)

Date Account Titles Debit Credit

 (1)Dec.3 Bad Debts Expense 6,150
1 [(840,000 – 20,000)x0.75%]
Allowance for Doubtful Accounts 6,150
(2)Dec.3 Bad Debts Expense 6,800
1 [(110,000 x 6%)+200]
Allowance for Doubtful Accounts 6,800

E9.8/

Date Account Titles Debit Credit

Dec.30,2020 Bad Debts Expense 9,000
(450,000 x 2%)
Allowance for Doubtful 9,000
Accounts
May.11,2021 Allowance for Doubtful Accounts 1,100
Accounts Receivable - Jeff 1,100
June.12,202 Accouns Receivable - Jeff 1,100
1
Allowance for Doubtful Accounts 1,100
Cash 1,100
Accounts Receivable - Jeff 1,100

E9.12/

(a)

Date Account Title Debit Credit

Nov.1 Notes Receivable (12 months, 10% note) 300,000
Cash 300,000
Dec.11 Notes Receivable (90 days, 8% note) 67,500
Cash 67,500
Dec.16 Notes Receivable (180 days, 9% note) 400,000
Cash 400,000
Dec.31 Interest Receivable 6,800
Interest Revenue 6,800
(Manny Shin: 300,000 x 2/12 x 10% = 5000
Malcom Inc: 67,500 x 20/360 x 8% = 300
Joe Fernetti: 400,000 x 15/360 x 9% = 1500)
(b)

Date Account Titles Debit Credit

Nov.1 Cash 330,000
Notes Reveivable 300,000
Interest Receivable 5,000
(300,000 x 2/12 x 10%)
Interest Revenue 25,000
 (300,000 x 10/12 x 10%)

E9.14/

Date Account Titles Debit Credit

Apr.1,2020 Notes Receivable (12 months, 6% note) 30,000
Accounts Receivable – Goodwin Co. 30,000
Jul.1, 2020 Notes Receivable (9 months, 10% note) 25,000
Cash 25,000
Dec.31, 2020 Interest Receivable 1,350
Interest Revenue 1,350
(Goodwin Co.: 30,000 x 9/12 x 6% = 1,350)
Interest Receivable 1,250
Interest Revenue 1,250
(Thomas: 25,000 x 6/12 x 10% = 1,250)
Apr.1, 2021 Cash 31,800
Note Receivable 30,000
Interest Receivable 1,350
Interest Revenue 450
(30,000 x 3/12 x 6%)
Apr.1, 2021 Accounts Reveivable – Thomas 26,875
Notes Receivable 25,000
Interest Receivable 1,250
Interest Revenue 625
(25,000 x 3/12 x 10%)

P9.2/

(a) Bad debts = 33,000

(b) Bad debts = 2,500,000 x 6% = 150,000
(c) Bad Debts = 875,000 x 6% +3,000 = 55,500
(d) The Weakness of the direct write off method does not attempt to match bad debt expense to
sale revenue nor accounts receivable in the balance sheet that expect to receive.

P9.3/

(a)

Hallenran Co.

Adjusiting Entry

Date Account Titles Debit Credit

Dec.31 Bad Debts Expense 26,610
, 2020 (38,610 – 12,000)
Allowance for Doubtful Accounts 26,610
Posting

Bad Debts Expense

Dec.31, 2020 Adj. 26,610
Bal. 26,610

Allowance for Doubtful Accounts

Dec.31, 2020 Adj. 26,610
Bal. 26,610
(b)

(1)

Hallenran Co.

Journal Entry

Date Account Titles Debit Credit

Mar.31 Allowance for Doutbful Accounts 1,000
, 2021
Accounts Receivable 1,000
(2)

Halleran Co.

Journal Entry

Date Account Titles Debit Credit

May.31 Accounts Receivable 1,000
, 2021
Allowance for Doubtful Accounts 1,000
Cash 1,000
Accounts Receivable 1,000

Posting

Allowance for Doubtful Accounts

May.31, 2020 Adj. 1,000 Dec.31, 2020 Bal. 1 12,000
Dec.31, 2020 Adj. 26,610
May.31, 2021 Adj. 1,000
Bal. 38,610
(c)

Helleran Co.

Adjusting Entry

Date Account Titles Debit Credit

Dec.31 Bad Debts Expense 29,400
, 2021 (28,600 – 800)
 29,400

Do It! 3

(a) Term of note:

Months Date Number of Days

May 10th 10
June 30th 30
July 31th 31
Maturity Date: August 8th 8
Total 90
The maturity date is August 8th
(b)
Interest = 3,400 x 6% x 90/360 = 51
The interest payable at the maturity date is $51.
(c)

Account Titles Debit Credit

Cash 3,451
Notes Receivable 3,400
Interest Revenue 51