Question

Q2. (25 marks) Prepare general journal entries for the following transactions of Laurier Company, who use the perpetual inventory system: Apr. 1 Sold $12.500 of merchandise (Cost $10,500) to flight Co., receiving a (10%, 120-day note. 15 Wrote off $2,000 owed by FCB Co. as worthless. (The allowance method of accounting for bad debts is used) 30 Received a $10,800, 10%, 30-day note receivable from Cruise Co. as an extension of credit. May 1 Issued a $7,000, 9%, 60 day note to Auggie Co. for cash. 30 Note received on April 30 was collected. Tuina 30 Aueria Chanaad Max1. nata

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

	Laurier Company
Date	Particulars	Debit $	Credit $
1-Apr	10% Notes Receivable- Flight Co.	12,500.00
	Sales		12,500.00
1-Apr	Cost of good sold	12,500.00
	Inventory		12,500.00
15-Apr	Allowance for Bad debts	2,000.00
	FCB Co.		2,000.00
30-Apr	10% Notes Receivable- Cruise Co.	10,800.00
	Cash		10,800.00
1-May	9% Notes Receivable- Auggie Co.	7,000.00
	Cash		7,000.00
30-May	Cash	10,890.00
	Interest Revenue		90.00	This is $ 10,800*10%/360*30.
	10% Notes Receivable- Cruise Co.		10,800.00
30-Jun	Cash	7,105.00
	Interest Revenue		105.00	This is $ 7,000*9%/360*60.
	9% Notes Receivable- Auggie Co.		7,000.00
30-Jun	Interest Receivable	312.50
	Interest Revenue		312.50	This is $ 12,500*10%/360*90.
15-Jul	FCB Co.	1,000.00
	Allowance for Bad debts		1,000.00
15-Jul	Cash	1,000.00
	FCB Co.		1,000.00