Doubtful Accounts

At December 31, before adjusting and closing the accounts had occurred, the Allowance for Doubtful Accounts of Wilton Corporation showed a debit balance of $5,300. An aging of the accounts receivable indicated the amount probably uncollectible to be $3,900. Under these circumstances, a year-end adjusting entry for uncollectible accounts expense would include a:

Answer

A) Debit to the Allowance for Doubtful Accounts for $1,400.

B) Credit to the Allowance for Doubtful Accounts for $1,400.

C) Debit to Uncollectible Accounts Expense of $3,900.

D) Debit to Uncollectible Accounts Expense of $9,200

9. Refer to the above data. Bella's entry to record the collection of this note at maturity includes a:
Answer

A) Credit to Accrued Interest Receivable of $7,000.

B) Credit to Interest Revenue of $7,000.

C) Credit to Interest Receivable of $3,000.

D) Credit to Notes Receivable of $132,000
Use the following to answer questions 8 - 9:
On June 1, 2001, Bela Company acquired a 10%, ten-month note receivable from a customer in settlement of an existing account receivable of $120,000. Interest and principal are due at maturity.
8. Refer to the above data. The proper adjusting entry at December 31, 2001, with regard to this note receivable includes a:
Answer
A) Debit to Cash of $7,000.
B) Debit to Notes Receivable of $12,000.
C) Credit to Interest Revenue of $12,000.
D) Debit to Accrued Interest Receivable of $7,000.