Mystic Magic issued a $120,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 10% annual interest rate. Amy Arnold does not pay on her account and dishonors the note. On November 10, 2018, Mystic Magic decides to sell the dishonored note to a collection agency for 20% of its value. Record the journal entries for Mystic Magic for the following transactions. If an amount box does not require an entry, leave it blank. Round your answers to two decimal places. A. Initial sale on January 1, 2018 B. Dishonored note entry on Oct 1, 2018 C. Receivable sale on November 10, 2018
Mystic Magic issued a $120,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 10% annual interest rate. Amy Arnold does not pay on her account and dishonors the note. On November 10, 2018, Mystic Magic decides to sell the dishonored note to a collection agency for 20% of its value. Record the journal entries for Mystic Magic for the following transactions. If an amount box does not require an entry, leave it blank. Round your answers to two decimal places. A. Initial sale on January 1, 2018 B. Dishonored note entry on Oct 1, 2018 C. Receivable sale on November 10, 2018
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 16EA: Mystic Magic issued a $120,250 note on January 1, 2018 to a customer, Amy Arnold, in exchange for...
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Mystic Magic issued a $120,000 note on January 1, 2018 to a customer, Amy Arnold, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 10% annual interest rate. Amy Arnold does not pay on her account and dishonors the note. On November 10, 2018, Mystic Magic decides to sell the dishonored note to a collection agency for 20% of its value.
Record the
A. Initial sale on January 1, 2018
B. Dishonored note entry on Oct 1, 2018
C. Receivable sale on November 10, 2018
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