Answer:
Journal Entries
Jan 03 Debit Note Receivable $21,600 Credit Bank $21,600
Feb 10 Debit Accounts Receivable $26,400 Credit Revenue $26,400
Debit Cost of goods sold $15,840 Credit Inventory $15,840
Feb 13 Debit Accounts Receivable $63,600 Credit Revenue $63,600
Debit Cost of goods sols $57,240 Credit Inventory $57,240
Mar 12 Debit Note Receivable $26,400 Credit Bank $26,400
Mar 14 Debit Note Receivable $63,600 Credit Bank $63,600
Apr 03 Debit Bank $373 Credit Interest income $373
Debit Bank $21,600 Credit Note Receivable(90 days7%) $21,600
Debit Note receivable(120 day 9%) $21,600 Credit Bank $21,600
May 11 Debit Bank $26,747 Credit Interest income $347 Credit Note Receivable $26,400
Jul 12 Debit Bank $67,087 Credit Interest income $3,487 Credit Note Receivable $63,600
Aug 01 Debit Bank $22,239 Credit Interest Income $639 Credit Note Receivable $21,600
Oct 05 Debit Accounts Receivable $12,250 Debit Trade Discount $250 Credit Revenue $12,500
Debit Cost of goods sold $7,500 Credit Inventory $7,500
Oct 15 Debit Bank $12,250 Credit Accounts Receivable $12,250
Explanation:
The Question is incomplete but the natures shows it requires Journal entries
April 03 Interest = 21600 * 7% * 90/365 = $372.82
The new note leads to cancellation of the old terms and loans therefore we need to reverse the entry by cancelling the 90 day and recognize a new loan with new terms (9% 120 day) of same amount.
May 11 interest = 26400*8%*60/365 = $347
July 12 Interest = 63600*9%*60/365 = $941
Maturity value = 941 + 63600 = $64541 *12%*120/365 =$2,546
Total interest = 2546+941 =$3,487
Dry Greek has missed a payment has the interest of 12% penalty and the 120 days of interest due.
Aug 01 Interest = 21600 *9% * 120/365 =
Oct 15 The 2% discount was already deducted as the amount for accounts receivable was net discount already. We can not give same discount twice.
