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Data & Forms P09-01

EXAMPLE
Problem 9-1: Allowance Write-Off Method of Accounting for Bad Debts
Given Data P09-01 1. Journalize transactions a through f in the general journal below. Every journal entry has a debit account title, a debit amount, a credit account title, and a credit amount.
Company's data and journal entry information: The following account titles and amounts are included in drop-down lists in the journal. Use them to record the journal entries.
Selected beginning account balances from a company's general ledger are
listed below. These balances are already entered in the General Ledger below. Accounts Receivable 800
Cash (beginning normal debit balance) $ 300,000 Allowance for Doubtful Accounts 1,200
Accounts Receivable (beginning normal debit balance) 214,000 Bad Debts Expense 9,000
Allowance for Doubtful Accounts (beginning normal Cash 14,200
credit balance) 5,000 Sales 16,800
18,200
Instructions: 1,400,000
1. Journalize the transactions a through f assuming the company uses 1,600,000
the allowance write-off method. 2,000,000
Ledger below.)
a. Made cash sales of $2,000,000.
b. Made credit sales of $1,600,000. General Journal
c. Collected $1,400,000 during year from customers on account.
d. Wrote off bad debts of $9,000 per year. Trans. Entries 1a, 1b, and 1 c are from Chapter 5. You should already know these.
e. Recovered bad debts of $1,200 from current year. No. Account Titles Debit Credit See demo problem for Chapter 5--it covers entries 1a, 1b, and 1c.
f. Recovered bad debts of $800 from previous year.
1a Cash Correct! 2,000,000 Correct! Selling for cash increases asset Cash and increases revenues Sales
2. Post transactions a through f to the general ledger accounts provided Sales Correct! 2,000,000 Correct! so debit is Cash and credit is Sales
below the general journal.
1b Accounts Receivable Correct! 1,600,000 Correct! Selling on account (for credit increases) asset Accounts Receivable and increases
3. After posting a through f, the balance of the Allowance for Bad Debts Sales Correct! 1,600,000 Correct! revenues Sales so debit is Accounts Receivable and credit is Sales
account should be a $2,000 debit. Assuming a debit of $2,000,
a. Calculate the year-end bad debt adjusting entry amount assuming the 1c Cash Correct! 1,400,000 Correct! Collecting from customer on account increases asset Cash and decreases asset
company uses the aging of receivables method and realizable Accounts Receivable Correct! 1,400,000 Correct! Accounts Receivable so debit Cash and credit Accounts Receivable
receivables are estimated at 96% of ending accounts receivable and
journalize the adjusting entry. (Hint: What is bad debt amount?) 1d Allowance for Doubtful Accounts Correct! 9,000 Correct! See last entry on page 363. Also in explained in lecture notes. To write off an
b. Calculate the year-end bad debt adjusting entry amount assuming the Accounts Receivable Correct! 9,000 Correct! account under the Allowance method, debit Allowance for Doubtful Accounts and
company uses the percent of sales method where 1.05% of credit and credit Accounts Receivable.
sales are estimated to be uncollectible and journalize the adjusting entry. 1e Accounts Receivable Correct! 1,200 Correct!
Allowance for Doubtful Accounts Correct! 1,200 Correct! See two entries in middle of page 364. Also explained in lecture notes. To reinstate
4. Assume the Allowance for Bad Debts account had a $2,000 normal credit Cash Correct! 1,200 Correct! an account, debit Accounts Receivable and credit Allowance for Doubtful accounts.
balance instead of the debit balance. Accounts Receivable Correct! 1,200 Correct! To show the collection debit Cash and credit Accounts Receivable.
a. Calculate the year-end bad debt adjusting entry amount if the
company uses the aging of receivables method and realizable 1f Accounts Receivable Correct! 800 Correct! Explained in lecture notes. Under the Allowance method, it makes no difference
receivables are estimated at 96% of ending accounts receivable Allowance for Doubtful Accounts Correct! 800 Correct! whether the recovery is in this current or later. So it's the same as the entry in 1e. To
and journalize the adjusting entry. (Hint: What is bad debt amount?) Cash Correct! 800 Correct! reinstate the account, debit Accounts Receivable and credit Allowance for Doubtful
b. Calculate the year-end bad debt adjusting entry amount if the Accounts Receivable Correct! 800 Correct! Accounts. To show the collection, debit Cash and credit Accounts Receivable, as usual.
company uses the percent of sales method where 1.05% of credit
sales are estimated to be uncollectible and journalize the adjusting entry.
2. Post transactions a through f to the following general ledger accounts.
Note: The allowance write-off method estimates bad debts and records this
estimate in the year of the sales. Thus, the allowance method is considered General Ledger Accounts
better than the direct write-off method because it does match revenues and
expenses in the same accounting period. It uses an Allowance account and Cash Account No. 101
makes an adjusting entry at the end of each fiscal period. Trans. Explanation Debit Credit Balance
Bal. Balance 300,000 300,000
a Cash sales 2,000,000 2,300,000
c Collections from customer on acct. 1,400,000 3,700,000
e Recovered bad debt current year 1,200 3,701,200
f Recovered bad debt previous year 800 3,702,000
Correct!
Accounts Receivable Account No. 102
Date Explanation Debit Credit Balance
Bal. Balance 214,000 214,000
b Credit sales 1,600,000 1,814,000
c Collections from customer on acct. 1,400,000 414,000
d Wrote off bad debt 9,000 405,000
e Recovered bad debt current year 1,200 406,200
e Recovered bad debt current year 1,200 405,000
f Recovered bad debt previous year 800 405,800
f Recovered bad debt previous year 800 405,000
Correct!
Allowance for Bad Debts Account No. 103
Date Explanation Debit Credit Balance
Bal. 5,000 5,000 Note: Allowance for Bad Debts is a contra asset account with a normal credit
d Wrote off bad debt 9,000 -4,000 balance so a negative balance in this account indicates a debit balance.
e Recovered bad debt current year 1,200 -2,800
f Recovered bad debt previous year 800 -2,000
Correct!
Capital Account No. 301
Date Explanation Debit Credit Balance
Bal. Balance 604,000 604,000
Sales Account No. 401
Date Explanation Debit Credit Balance
a Cash Sales 2,000,000 2,000,000
b Credit Sales 1,600,000 3,600,000
Correct!
3. After posting a through f, the balance of the Allowance for Bad Debts Note for both Parts 3 and 4:
0 account should be a $2,000 debit. Assuming a debit of $2,000, When using the aging of receivables method, theAllowance account balance must be considered/used.
a. Calculate the year-end bad debt adjusting entry amount assuming the When using the percent of sales mehtod, the Allowance account balance is not considered/used.
company uses the aging of receivables method and realizable See pages 364-367 in text about estimating bad debts and adjusting entry for it using both
receivables are estimated at 96% of ending accounts receivable and the aging of receivables and percent of sales method. Also review lecture notes for lesson
journalize the adjusting entry. (Hint: What is bad debt amount?) and see attached Word file for additional explanation.
b. Calculate the year-end bad debt adjusting entry amount assuming the
company uses the percent of sales method where 1.05% of credit Calculation for Entry 3a:
sales are estimated to be uncollectible and journalize the adjusting entry. Calculated on receivables balance--consider/use Allowance balance in determining
amount of adjusting entry.
Uncollectible receivables % * Ending receivables balance = 4% * 405,000 = 16,200
To record adjusting entry for estimated bad debts (regardless of 3a Bad Debts Expense Correct! 18,200 Correct! so 16,200 must be the ending Allowance balance after the adjusting entry is posted.
estimation method, either aging of receivables or percent of sales), Allowance for Doubtful Accounts Correct! 18,200 Correct! Since the Allowance balance was $2,000 debit before the adjusting, then the adjusting
always debit Bad Debt Expense and credit Allowance for Doubtful entry must be for $18,200 (16,200+2,000) to end up with a $16,200 credit balance in
Accounts. See estimation methods and adjusting entries on pages 3b Bad Debts Expense Correct! 16,800 Correct! the Allowance account.
364-367. Allowance for Doubtful Accounts Correct! 16,800 Correct! Calculation for Entry 3b:
Calculated on credit sales only--do not consider/use Allowance balance in determining
amount of adjusting entry.
4. Assume the Allowance for Bad Debts account had a $2,000 normal credit % credit sales uncollectible * Credit sales = $1.05 * $1,600,000 = $16,800
balance instead of the debit balance. You do not consider the Allowance balance so $16,800 is the adjusting entry amount.
a. Calculate the year-end bad debt adjusting entry amount if the
company uses the aging of receivables method and realizable
receivables are estimated at 96% of ending accounts receivable
and journalize the adjusting entry. (Hint: What is bad debt amount?)
b. Calculate the year-end bad debt adjusting entry amount if the
company uses the percent of sales method where 1.05% of credit Calculation for Entry 4a:
sales are estimated to be uncollectible and journalize the adjusting entry. Calculated on receivables balance--consider/use Allowance balance in determining
amount of adjusting entry.
Uncollectible receivables % * Ending receivables balance = 4% * 405,000 = 16,200
To record adjusting entry for estimated bad debts (regardless of 4a Bad Debts Expense Correct! 14,200 Correct! so 16,200 must be the ending Allowance balance after the adjusting entry is posted.
estimation method, either aging of receivables or percent of sales), Allowance for Doubtful Accounts Correct! 14,200 Correct! Assuming the Allowance balance was $2,000 credit before the adjusting, then the adjusting
always debit Bad Debt Expense and credit Allowance for Doubtful entry must be for $14,200 (16,200-2,000) to end up with a $16,200 credit balance in
Accounts. See estimation methods and adjusting entries on pages 4b Bad Debts Expense Correct! 16,800 Correct! the Allowance account.
364-367. Allowance for Doubtful Accounts Correct! 16,800 Correct! Calculation for Entry 4b (no different from 3b):
Calculated on credit sales only--do not consider/use Allowance balance in determining
amount of adjusting entry.
% credit sales uncollectible * Credit sales = $1.05 * $1,600,000 = $16,800
You do not consider the Allowance balance so $16,800 is the adjusting entry amount.

Data & Forms P09-02

EXAMPLE
Problem 9-2: Direct Write-Off Method of Accounting for Bad Debts
Given Data P09-01 1. Journalize transactions a through f in the general journal below. Every journal entry has a debit account title, a debit amount, a credit account title, and a credit amount.
The following account titles and amounts are included in drop-down lists in the journal. Use them to record the journal entries.
Company's data and journal entry information:
Selected beginning account balances from a company's general ledger are Accounts Receivable 800
listed below. These balances are already entered in the General Ledger below. Bad Debts Expense 1,200
Cash (beginning normal debit balance) $ 300,000 Bad Debts Recovered 9,000
Accounts Receivable (beginning normal debit balance) 214,000 Cash 1,400,000
Sales 1,600,000
2,000,000
Instructions:
1. Journalize the transactions a through f assuming the company uses
the allowance write-off method. General Journal
Ledger below.)
a. Made cash sales of $2,000,000. Trans. Entries 1a, 1b, and 1 c are from Chapter 5. You should already know these.
b. Made credit sales of $1,600,000. No. Account Titles Debit Credit See demo problem for Chapter 5--it covers entries 1a, 1b, and 1c.
c. Collected $1,400,000 during year from customers on account.
d. Wrote off bad debts of $9,000 per year. 1a Cash Correct! 2,000,000 Correct! Selling for cash increases asset Cash and increases revenues Sales
e. Recovered bad debts of $1,200 from current year. Sales Correct! 2,000,000 Correct! so debit is Cash and credit is Sales
f. Recovered bad debts of $800 from previous year.
1b Accounts Receivable Correct! 1,600,000 Correct! Selling on account (for credit increases) asset Accounts Receivable and increases
2. Post transactions a through f to the general ledger accounts provided Sales Correct! 1,600,000 Correct! revenues Sales so debit is Accounts Receivable and credit is Sales
below the general journal.
1c Cash Correct! 1,400,000 Correct! Collecting from customer on account increases asset Cash and decreases asset
Accounts Receivable Correct! 1,400,000 Correct! Accounts Receivable so debit Cash and credit Accounts Receivable
Notes: 1d Bad Debts Expense Correct! 9,000 Correct! See first entry on page 362. Also in explained in lecture notes. To write off an
The direct write-off method waits until it is determined who is not Accounts Receivable Correct! 9,000 Correct! account under the Direct Write-Off method, debit Bad Debts Expense and
going to pay and then the account is written off directly to the Bad Debts and credit Accounts Receivable.
Expense account. There is no Allowance account used; therefore, there 1e Accounts Receivable Correct! 1,200 Correct!
are no adjusting entries to make. A bad debt may be recorded in a year Bad Debts Recovered Correct! 1,200 Correct! See two entries in middle of page 362. Also explained in lecture notes. To reinstate
different from the year of the sale. Thus, the direct write-off method is not Cash Correct! 1,200 Correct! an account in current year under direct write-off, debit Accounts Receivable and credit
the best method because it does not match revenues and expenses in the Accounts Receivable Correct! 1,200 Correct! Bad Debts Expense. To show the collection, debit Cash and credit Accounts Receivable.
same accounting period.
1f Accounts Receivable Correct! 800 Correct! Explained in lecture notes. Under the Direct Write-Off method, it does make a difference
Bad Debts Recovered is used to show cash collections for accounts Bad Debts Expense Correct! 800 Correct! whether the recovery is in current or later year. So this entry is different from Entry 1e. To
written off in previous accounting periods. It is a contra expense account, Cash Correct! 800 Correct! reinstate an account recovered in year after write-off, debit Accounts Receivable and credit Bad Debts
which is deducted from Bad Debts Expense on the income statement. Accounts Receivable Correct! 800 Correct! Recovered. To show the collection, debit Cash and credit Accounts Receivable, as usual.
There is no bad debts adjusting entry under the direct write-off method.
2. Post transactions a through f to the following general ledger accounts.
General Ledger Accounts
Cash Account No. 101
Trans. Explanation Debit Credit Balance
Bal. Balance 300,000
a Cash sales 2,000,000 2,300,000
c Collections from customer on acct. 1,400,000 3,700,000
e Recovered bad debt current year 1,200 3,701,200
f Recovered bad debt previous year 800 3,702,000
Correct!
Accounts Receivable Account No. 102
Date Explanation Debit Credit Balance
Bal. Balance 214,000 214,000
b Credit sales 1,600,000 1,814,000
c Collections from customer on acct. 1,400,000 414,000
d Wrote off bad debt 9,000 405,000
e Recovered bad debt current year 1,200 406,200
e Recovered bad debt current year 1,200 405,000
f Recovered bad debt previous year 800 405,800
f Recovered bad debt previous year 800 405,000
Correct!
Capital Account No. 301
Date Explanation Debit Credit Balance
Bal. Balance 604,000 604,000
Sales Account No. 401
Date Explanation Debit Credit Balance
a Cash sales 2,000,000 2,000,000
b Credit sales 1,600,000 3,600,000
Correct!
Bad Debts Expense Account No. 501
Date Explanation Debit Credit Balance Note: Bad Debts Expense is used to show cash collections for accounts
d Wrote off bad debt 9,000 9,000 written off in current accounting period. It is an expense account,
f Recovered bad debt current year 1200 7,800 which is reported on the income statement.
Correct!
Bad Debts Recovered (a contra expense account) Account No. 502 Note: Bad Debts Recovered is used to show cash collections for accounts
Date Explanation Debit Credit Balance written off in previous accounting periods. It is a contra expense account,
e Recovered bad debt previous year 800 800 which is deducted from Bad Debts Expense on the income statement.
Correct!
0

Data & Forms P09-03A

EXAMPLE
Problem 9-3: Notes Receivable
Instructions: Form for Completing Part 1:
1. Calculate total interest and maturity value for following notes. Use 360 days in 1. Calculate total interest and maturity value for following notes. Use 360 days
a year for interest calculations and assume that it is not leap year. in a year for interest calculations and assume that it is not leap year.
a. $60,000, 90-day, 12% note, dated October 1 a. $60,000, 90-day, 12% note, dated October 1
b. $80,000, 90-day, 12% note, dated December 1 b. $80,000, 90-day, 12% note, dated December 1
c. $120,000, 60-day, 10% note, dated October 1 c. $120,000, 60-day, 10% note, dated October 1
Select the amounts and dates from the drop-down list in the chart.
2. Journalize and post the following note transactions.
Total Interest Maturity Value Maturity Date
1a. Received a $60,000, 90-day, 12% note from a sale. a. 1,800 61,800 Dec. 30
1b. Collected the note and interest (within same year as receipt of note). Correct! Correct! Correct!
b. 2,400 82,400 Mar. 1
2a. Received a $80,000, 90-day, 12% note from customer to apply on account. Correct! Correct! Correct!
2b. Record adjusting entry for accrued interest. c. 2,000 122,000 Nov. 30
2c. Collected note and interest (in different year from receipt of note). Correct! Correct! Correct!
3a. Received a $120,000, 60-day, 10% note for loaning cash.
3b. Customer dishonored note (within same year as receipt of note).
4 Sold $40,000 of accounts receivable and is charged a 3% factoring fee.
5 Borrowed $60,000 with note, pledging receivables of $70,000 as security.
6 Made credit card sales of $2,000 with a 3% fee, receiving cash immediately.
7a. Made credit card sales of $2,000 with a 3% fee, for which company
will remit credit card receipts electronically and wait for the cash.
7b. Received cash from credit card company through electronic funds transfer.
2. Journalize and post the following note transactions, using the general journal and
general ledger provided below. (You will use the amounts calculated in Part 1.)
The following account titles and amounts are included in the drop-down lists in the chart for
Part 1 and the journal for Part 2.
Note: Remember, every journal entry needs a debit account title, debit amount, credit
account title, and credit amount.
Account Titles Amounts Due Dates
Accounts Payable 60 Feb. 28
Accounts Receivable 800 Mar. 1
Cash 1,200 Mar. 2
Credit Card Expense 1,600 Nov. 29
Factoring Fee Expense 1,800 Nov. 30
Interest Receivable 1,940 Dec. 1
Interest Revenue 2,000 Dec. 29
Notes Receivable 2,400 Dec. 30
Sales 38,800 Dec. 31
40,000
60,000
61,800
80,000
82,400
120,000
122,000
General Journal
Trans.
No. Account Titles Debit Credit
1a. Oct. 1 Received a $60,000, 90-day, 12% note from a sale. 1a. See journal entry bottom of page 369. Debit Notes Receivable when note is
Notes Receivable Correct! 60,000 «- Correct! received and credit Sales if from a sale.
Sales Correct! 60,000 «- Correct!
1b. Dec. 30 Collected the note and interest. 1b. See 2nd entry on page 370. Debit Cash for maturity value, credit Notes Receivable
Cash Correct! 61,800 «- Correct! for face of note, credit Interest Revenue for interest earned.
Notes Receivable Correct! 60,000 «- Correct! Calculation: 60,000 * 12% * 90/360 = $1,800 interest so maturity value is
Interest Revenue Correct! 1,800 «- Correct! 60,000 + 1,800
2a. Dec. 1 Received a $80,000, 90-day, 12% note from customer to apply on 2a If note received is to apply on account, then debit Notes Receivable and credit
account. Accounts Receivable.
Notes Receivable Correct! 80,000 «- Correct!
Accounts Receivable Correct! 80,000 «- Correct!
2b. Dec. 31 Record adjusting entry for accrued interest. 2b See entry at bottom of page 370. When interest is earned but uncollected because
Interest Receivable Correct! 800 «- Correct! of maturity date, debit Interest Receivable and credit Interest Revenue.
Interest Revenue Correct! 800 «- Correct! Calculation: Interest earned Dec. 1-31 = 80,000 * 12% * 30/360
2c. Mar. 1 Collected note and interest (in different year from receipt of note). 2c. See 1st entry on page 371. When a note is collected in a period different from when
Cash Correct! 82,400 «- Correct! it was received, debit Cash for maturity value, credit Interest Revenue for this period's
Interest Revenue Correct! 1,600 «- Correct! interest, credit Interest Receivable for last period's interest, and credit Notes
Interest Receivable Correct! 800 «- Correct! Receivable for the face value of the note.
Notes Receivable Correct! 80,000 «- Correct! Calculation: Current interest earned = 80,000 * 12% * 90/360 = $2,400 total interest
$800 last period = $1,600 current interest/Maturity value= 80,000 + 2,400
3a. Oct. 1 Received a $120,000, 60-day, 10% note for loaning cash. 3a. When note is received from loaning cash, debit Notes Receivable and credit Cash.
Notes Receivable Correct! 120,000 «- Correct!
Cash Correct! 120,000 «- Correct!
3b. Nov. 30 Customer dishonored note (within same year as receipt of note). 3b. See 3rd entry on page 370. When note is dishonored, maturity value of note is
Accounts Receivable Correct! 122,000 «- Correct! charged back to Accounts Receivable. Debit Accounts Receivable for maturity value,
Interest Revenue Correct! 2,000 «- Correct! credit Interest Revenue for interest earned, and credit Notes Receivable for face
Notes Receivable Correct! 120,000 «- Correct! value.
Calculation: 120,000 * 10% * 60/360 = 2,000 so maturity value is 120,000 + 2,000
4. Sold $40,000 of accounts receivable and is charged a 3% factoring 4. See entry at bottom of page 371. When receivables are sold, debit Cash for
fee. receivables amount less fee. Debit Factoring Fee Expense for fee. Credit Accounts
Cash Correct! 38,800 «- Correct! Receivable for receivables face amount factored.
Factoring Fee Expense Correct! 1,200 «- Correct! Calculation: 40,000 * 3% = 1,200 fee so cash received is 40,000 - 1,200
Accounts Receivable Correct! 40,000 «- Correct!
5. Borrowed $60,000 with note, pledging receivables of $70,000 as 5. See 1st entry on page 372. When cash is borrowed against receivables, debit Cash
security. and credit Notes Payable for amount of cash received--not amount of pledged
Cash Correct! 60,000 «- Correct! receivables.
Accounts Payable Correct! 60,000 «- Correct!
6. Made credit card sales of $2,000 with a 3% fee, receiving cash 6. See last entry on page 360. When cash is received immediate from credit card sale,
immediately. debit Cash for amount of sale less fee, debit Credit Card Expense for fee, and credit
Cash Correct! 1,940 «- Correct! Sales for amount of sale.
Credit Card Expense Correct! 60 «- Correct!
Sales Correct! 2,000 «- Correct!
7a. Made credit card sales of $2,000 with a 3% fee, for which company 7a. See 1st entry on page 361. When credit card received (like AMEX), debit Accounts
will remit credit card receipts electronically and wait for the cash. Receivable for sale less fee, debit Credit Card Expense for fee, and credit Sales for
Accounts Receivable Correct! 1,940 «- Correct! amount of sale.
Credit Card Expense Correct! 60 «- Correct!
Sales Correct! 2,000 «- Correct!
7b. Received cash from credit card company through electronic funds 7b. See 2nd entry on page 361. When credit card company pays us, debit Cash and
transfer. credit Accounts Receivable for amount received.
Cash Correct! 1,940 «- Correct!
Accounts Receivable Correct! 1,940 «- Correct!
2. Post transactions 1 through 7 to the following general ledger accounts.
General Ledger Accounts
Cash Account No. 101
Trans. Explanation Debit Credit Balance
Bal. 100,000 100,000
1b 61,800 161,800 «- Correct!
2c 82,400 244,200 «- Correct!
3a 120,000 124,200 «- Correct!
4 38,800 163,000 «- Correct!
5 60,000 223,000 «- Correct!
6 1,940 224,940 «- Correct!
7b 1,940 226,880 «- Correct!
Notes Receivable Account No. 102
Date Explanation Debit Credit Balance
1a 60,000 60,000 «- Correct!
1b 60,000 0 «- Correct!
2a 80,000 80,000 «- Correct!
2c 80,000 0 «- Correct!
3a 120,000 120,000 «- Correct!
3b 120,000 0 «- Correct!
Accounts Receivable Account No. 103
Date Explanation Debit Credit Balance
Bal. 100,000 100,000
2a 80,000 20,000 «- Correct!
3b 122,000 142,000 «- Correct!
4 40,000 102,000 «- Correct!
7a 1,940 103,940 «- Correct!
7b 1,940 102,000 «- Correct!
Interest Receivable Account No. 103
Date Explanation Debit Credit Balance
2b 800 800 «- Correct!
2c 800 0 «- Correct!
Accounts Payable Account No. 201
Date Explanation Debit Credit Balance
5 60,000 60,000 «- Correct!
Sales Account No. 401
Date Explanation Debit Credit Balance
Bal. 200,000 200,000
1a 60,000 260,000 «- Correct!
6 2,000 262,000 «- Correct!
7a 2,000 264,000 «- Correct!
Interest Revenue Account No. 402
Date Explanation Debit Credit Balance
1b 1,800 1,800 «- Correct!
2b 800 2,600 «- Correct!
2c 1,600 4,200 «- Correct!
3b 2,000 6,200 «- Correct!
Factoring Fee Expense Account No. 501
Date Explanation Debit Credit Balance
4 1,200 1,200 «- Correct!
Credit Card Expense Account No. 502
Date Explanation Debit Credit Balance
6 60 60 «- Correct!
7a 60 120 «- Correct!