Question

5. Baylee Company issued a note to a customer for merchandise purchased. It was a 45 day, $5000 note @ 10%. On day, 30 financial statements were prepared. Record the following entries: a. The issuing of the note b. The accrual of interest before financial statement preparation c. The retirement of the note. 6. Keaubie Company has receivables totaling $433,000. They use an Aging of Receivables Report to estimate what will be uncollectible. In addition to receivables, they have the following current assets: Cash $1,000,000; Merchandise Inventory: $350,000; Prepaid Insurance: $3000; Supplies: $5000. a. Complete the Aging of Receivables Report to determine uncollectible amount. Record the transaction b. Prepare a Current Assets section of a balance sheet. Aging of Receivables Report eceivable $185,500 $98,500 $67,000S60 000 $22,000 Amount of Days Owed Percent Uncollectible 0-30 31-60 61-90 91-120 Over 120 1.8% 6.5% 11% 29% 51% Amount Uncollectible Total Estimated Uncollectible

Answer 1

Solution 5:

Journal Entries - Baylee Company
Event	Particulars	Debit	Credit
a	Inventory Dr	$5,000.00
	To Note Payable		$5,000.00
	(To record merchandise purchased by issuing note)
b	Interest expense Dr ($5,000*10%*30/360)	$41.67
	To Interest Payable		$41.67
	(To record interest expense accrued)
c	Note Payable Dr	$5,000.00
	Interest expense Dr ($5,000*10%*15/360)	$20.83
	Interest payable Dr	$41.67
	To Cash		$5,062.50
	(To record retirement of note on maturity)

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