These transactions took place for Sheffield Corp. 2016 May 1 Received a $4,600, 12-month, 3% note in exchange for an outstanding account receivable from R. Stoney. Dec. 31 Accrued interest revenue on the R. Stoney note. 2017 May 1 Received principal plus interest on the R. Stoney note. (No interest has been accrued since December 31, 2016.) Record the transactions in the general journal. The company does not make entries to accrue interest except at December 31.(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
These transactions took place for Sheffield Corp.
| 2016 | ||
| May 1 | Received a $4,600, 12-month, 3% note in exchange for an outstanding account receivable from R. Stoney. | |
| Dec. 31 | Accrued interest revenue on the R. Stoney note. | |
| 2017 | ||
| May 1 | Received principal plus interest on the R. Stoney note. (No interest has been accrued since December 31, 2016.) |
Record the transactions in the general journal. The company does not make entries to accrue interest except at December 31.(Credit account titles are automatically indented when amount is entered. Do not indent manually. Record
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