The following notes receivable transactions occurred for Harris Company during the last three months of the current year. (Assume all notes are dated the day the transaction occurred.) Oct. 9 Received a $5,000, 12%, 60-day note from K. Weedon, a customer, for merchandise originally purchased on account. 12 Received a $6,000, 10%, 90-day note from M. Black, a customer, for merchandise originally purchased on account. 15 Sold the Weedon note with recourse at the bank at 14%. The fair value of the recourse liability is estimated to be $1,230. Nov. 11 Sold the Black note with recourse at the bank at 15%. The fair value of the recourse liability is estimated to be $850. 16 Received an $8,000, 12%, 60-day note from B. Butcher, a customer, for merchandise originally purchased on account. 20 Received a $6,000, 11%, 120-day note from D. Goldman, a customer, for merchandise originally purchased on account. Dec. 1 Received a $9,000, 13%, 60-day note from S. Lambert, a customer, for merchandise originally purchased on account. 8 Received notice that the Weedon note was paid at maturity. 10 Sold the Goldman note without recourse at the bank at 13%. Required: 1. Prepare the journal entries to record the preceding note transactions and the necessary adjusting entries on December 31. (Assume that Harris does not normally sell its notes and uses a 360-day year for the purpose of computing interest. Round all calculations to the nearest penny.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 13P: Notes Receivable Transactions The following notes receivable transactions occurred for Harris...

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The following notes receivable transactions occurred for Harris Company during the last three months of the current year. (Assume all notes are dated the day the transaction occurred.)

Oct.	9	Received a $5,000, 12%, 60-day note from K. Weedon, a customer, for merchandise originally purchased on account.
	12	Received a $6,000, 10%, 90-day note from M. Black, a customer, for merchandise originally purchased on account.
	15	Sold the Weedon note with recourse at the bank at 14%. The fair value of the recourse liability is estimated to be $1,230.
Nov.	11	Sold the Black note with recourse at the bank at 15%. The fair value of the recourse liability is estimated to be $850.
	16	Received an $8,000, 12%, 60-day note from B. Butcher, a customer, for merchandise originally purchased on account.
	20	Received a $6,000, 11%, 120-day note from D. Goldman, a customer, for merchandise originally purchased on account.
Dec.	1	Received a $9,000, 13%, 60-day note from S. Lambert, a customer, for merchandise originally purchased on account.
	8	Received notice that the Weedon note was paid at maturity.
	10	Sold the Goldman note without recourse at the bank at 13%.

Required:

1.	Prepare the journal entries to record the preceding note transactions and the necessary adjusting entries on December 31. (Assume that Harris does not normally sell its notes and uses a 360-day year for the purpose of computing interest. Round all calculations to the nearest penny.)

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