If on Jan. 24 Great Adventures purchases outdoor gear such as ropes, helmets, harnesses, compasses, and other miscellaneous equipment for $6,000 cash. The adjusting entry for uncollectible accounts and the accrued interest revenue are:
a. The adjusting entry for uncollectible accounts are:
Jan. 24, 2022
Debit Equipment $6,000
Credit Cash $ 6,000
(To record purchase of equipment and other materials)
Feb. 25
Debit Account Receivable $4,000
Credit Service Revenue $4,000
(To record service revenue on account)
Feb. 28
Debit Cash $3,840
($4,000-$160)
Debit Cash Discount $160
(4%×$4,000)
Credit Account Receivable $4,000
(To record cash receipt and discount)
Mar. 19
Debit Account Receivable $5,000
Credit Service Revenue $5,000
(To record service provided on account)
Mar. 27
Debit Cash $4,800
($5,000-$200)
Debit Cash Discount $200
(4%×$5,000)
Credit Account Receivable $5,000
(To record cash receipt and discount allowed)
April 7
Debit Cash $8,500
Credit Unearned Service Revenue $8,500
(To record cash receipt for providing service in future)
April 14
Debit Unearned Service Revenue $8,500
Credit Service Revenue $8,500
(To record unearned revenue being earned)
April 30
Debit Account Receivable $7,000
Credit Service Revenue $7,000
(To record service provided on account)
May 31
Debit Note Receivable $7,000
Credit Account Receivable $7,000
(To record a 3 months, 7% Note Receivable)
Jun. 15
Debit Account Receivable $29,000
Credit Service Revenue $29,000
(To record service provided on account)
b. The journal entries to record the accrued interest revenue are:
Jun. 30
Debit Interest Receivable $40.83
Interest Revenue $40.83
($7,000×7%× 1/12)
(To record accrued interest for 1 month)
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