Journal Entries!!

Question 1

Allowance for Uncollectible Accounts:
1) Establish Allowance

(To add 3% of sales to the allowance account ($2,500,000 x 3% = $75,000)

Answer 1

1) Uncollectible Accounts Expense 75,000 (dr)

Allow. For Uncollectible Accounts 75,000 (cr)

Question 2

Allowance for Uncollectible Accounts:
2) Write-off Account

(To write-off an uncollectible account)

Answer 2

2) Allow. for Uncollectible Accounts 1,000 (dr)

Accounts Receivable 1,000 (cr)

Question 3

Asset Sales

Sold equipment costing $100,000 for $10,000. The equipment was 75% depreciated on the date of the sale

Answer 3

Accumulated Depreciation 75,000 (dr)
Loss 15,000 (dr)
Cash 10,000 (dr)
Equipment 100,000 (cr)

Note: A Gain would be recorded if the sales proceeds exceeded the net book value of the asset sold.

Question 4

Bonds Payable Issued Between Interest Dates

To record issuance of 100, 12% bonds

Answer 4

Cash 102,000 (dr)
Interest Payable 2,000 (cr)
Bonds Payable 100,000 (cr)

Question 5

Bonds Payable Issued Between Interest Dates

To record interest payment - includes return of accrued interest payable from original issue on June 1

Answer 5

Interest Expense 4,000 (dr)
Interest Payable 2,000 (dr)
Cash 6,000 (cr)

Question 6

Bonds Payable at Discount

To record issuance of 100, 8%, 5-year bonds at discount

Answer 6

Cash 92,278 (dr)
Discount on Bonds Payable 7,722 (dr)
Bonds Payable 100,000 (cr)

Question 7

Bonds Payable at Discount

(To record interest payment (this entry occurs on every interest payment date at 6 month intervals) and amortization of discount

Answer 7

Interest Expense 4,772 (dr)
Discount on Bonds Payable 772 (cr)
Cash 4,000 (cr)

Question 8

Bonds Payable at Discount

To record payment of face value at maturity

Answer 8

Bonds Payable 100,000 (dr)

Cash 100,000 (cr)

Question 9

Bonds Payable at Par

To record issuance of 100, 8%, 5-year bonds at par (100 x $1,000 each

Answer 9

Cash 100,000 (dr)

Bonds Payable 100,000(cr)

Question 10

Bonds Payable at Par

(To record interest payment - this entry occurs on every interest payment date at 6 month intervals- and amortization of discount)

Answer 10

Interest Expense 4,772(dr)
Discount on Bonds Payable 772(cr)
Cash 4,000 (cr)

Question 11

Bonds Payable at Par

To record payment of face value at maturity

Answer 11

Bonds Payable 100,000 (dr)

Cash 100,000 (cr)