Presented below is information related to James Garfield Corp., which sells merchandise with terms 2/10, net 60. Garfield records its sales and receivables net.July 1 James Garfield Corp. sold to Warren Harding Co. merchandise having a sales price of$8,000.5Accounts receivable of $9,000 (gross) are factored with Andrew Jackson Credit Corp.without recourse at a financing charge of 9%. Cash is received for the proceeds; collectionsare handled by the finance company. (These accounts were all past the discount period.)9Specific accounts receivable of $9,000 (gross) are pledged to Alf Landon Credit Corp.as security for a loan of $6,000 at a finance charge of 6% of the amount of the loan. Thefinance company will make the collections. (All the accounts receivable are past the discountperiod.)Dec. 29Warren Harding Co. notifies Garfield that it is bankrupt and will pay only 10% of itsaccount. Give the entry to write off the uncollectible balance using the allowance method.(Note: First record the increase in the receivable on July 11 when the discount periodpassed.)InstructionsPrepare all necessary entries in general journal form for Garfield Corp.

Journal: Journal is the book of original entry. Journal consists of the day today financial…

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College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 4SEB: FINANCIAL RATIOS Based on the financial statements, shown on pages 605606, for McDonald Carpeting...

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Presented below is information related to James Garfield Corp., which sells merchandise with terms 2/10, net 60. Garfield records its sales and receivables net.

July 1		James Garfield Corp. sold to Warren Harding Co. merchandise having a sales price of $8,000.
5	Accounts receivable of $9,000 (gross) are factored with Andrew Jackson Credit Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. (These accounts were all past the discount period.)
9	Specific accounts receivable of $9,000 (gross) are pledged to Alf Landon Credit Corp. as security for a loan of $6,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. (All the accounts receivable are past the discount period.)
Dec. 29	Warren Harding Co. notifies Garfield that it is bankrupt and will pay only 10% of its account. Give the entry to write off the uncollectible balance using the allowance method. (Note: First record the increase in the receivable on July 11 when the discount period passed.)

Instructions

Prepare all necessary entries in general journal form for Garfield Corp.

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