Answered: Here are some possible relevant…

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter14: Accounting For Uncollectible Accounts Receivable

Section: Chapter Questions

Problem 1MP

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Question

Here are some possible relevant accounts for the journal entries that follow:

Cash	Merchandise Inventory	Interest Expense	Accounts Payable
Accounts Receivable	Interest Income	Sales	Short-Term Notes Payable

PLEASE NOTE: You will enter the account names exactly as written above and all dollar amounts will be rounded to whole dollars using "$" with commas as needed (i.e. $12,345). Follow the textbook format for the order of accounts in the journal entries.

Serene Company purchases fountains for its inventory from Kirkland Inc. The following transactions take place during the current year. Record the journal entries to recognize the initial purchase, the conversion, and the payment

On July 3, the company purchases thirty fountains for $1,200 per fountain, on credit. Terms of the purchase are 2/10, n/30, invoice dated July 3.
DR

CR
On August 3, Serene does not pay the amount due and renegotiates with Kirkland. Kirkland agrees to convert the debt owed into a short-term note, with an 8% annual interest rate, payable in two months from August 3.
DR

CR
On October 3, Serene Company pays its account in full.
DR

DR or CR?

CR

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