unt of Record the sale on Dale Companys books Date Account Titles Debit 1 510

# Unt of record the sale on dale companys books date

This preview shows page 18 - 26 out of 38 pages.

unt of
Record the sale on Dale Company's books. Date Account Titles Debit 1 5/10 Cash 2,592.00 2 Service charge expense 108.00 3 sales 4 5 Credit card sales: 3 parties to a credit card sale The credit card company The retailer from whick the merchandis is purchased The customer In most cases a sale by credit card is consided to be a cash sale The retailer pays anywhere from 2% to 6% as a fee to the credit c On May 10, Dale Company sold merchandise for \$2,700 and accepted customers' National Bank MasterCard. National Bank charges a 4% s charge for credit card sales.
Credit 1 2 2,700.00 3 4 5 card company for use of their credit card. d the service
Date of note = April 1 Term = 60 days Amount = \$ 600,000 Interest rate = 9% What is the maturity date? April (30- 1) 29 May 31 Total: 60 What is the total interest due at maturity? 600,000 x 9% x 60/360 9,000 Date of note = March 7 Note: Interest Term = 6 months Terms a Amount = \$ 120,000 If terms Interest rate = 10% What is the maturity date? For a no September 7th What is the total interest due at maturity? 120,000 x 10% x 6/12 6,000 Assumpt
t rates are presented as annual rate are stated as days or months or even years s are stated as months, you count the months Ex: A two month note stated Aug 1 would be due Oct 1 or Aug 15 would be Oct 15. ote that interest is expressed in days you must count the numbers of days tions : 12 months in a year and 360 days in a BANKING year. IF note is stated in days you don’t count the first day.
2017 Record the conversion of the accounts receivable to a note receivable. Date Account Titles Debit Credit 1 5/1 Notes recievable- Pulaski 60,000.00 2 Accounts recievable - Pulaski 60,000.00 3 4 5 On December 31, accrue interest on the Pulaski note. Date Account Titles Debit Credit 1 12/31 Interest receviable ( B/S- Asset) 4,000.00 2 Interest revenue (I/S- Other inc) 4,000.00 3 (60,000 x 10% x 8/12) 4 5 On December 31, close the interest revenue account. Date Account Titles Debit Credit 1 12/31 Interest revenue 4,000.00 2 Income summary 4,000.00 3 Note: At the end of the year all temp. accounts are closed 4 5 2018 Received principal plus interest on the Pulaski note. No interest has been accru How much cash will they collect? Principal Principal Interest (60,000 x 10%) Total: Record the receipt of the note. Date Account Titles Debit Credit 1 5/1 Cash 66,000.00 2 Note recievable 60,000.00 On May 1, Olympia Co. received a \$60,000, 1-year, 10% note in exchange for John Pulaski's outstanding accounts receivable.
3 Interest recievable ( from 12/31/17 4,000.00 4 Interest revenue 2,000.00 5
Notes: A note recivable is always recorded at face value Interest is earned on the note through a passage of time 1 A note can be disposed of 2 ways 2 Honored

#### You've reached the end of your free preview.

Want to read all 38 pages?

• Fall '18
• Mrs. Hess
• Revenue, Debt, Generally Accepted Accounting Principles, Doubtful Accounts