PROBLEM 14A-3
JOYE CO.
GENERAL JOURNAL
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Jun.
Cash
53
7
1
6
67
Discount on Notes Payable
1
2
8
3
33
Notes Payable
55
0
0
0
00
Borrowed at a discount
Aug.
Interest Expense
1
2
8
3
33
Notes Payable
55
0
0
0
00
Discount on Notes Payable
1
2
8
3
33
Cash
55
0
0
0
00
Paid note
Nov.
Cash
18
7
5
0
00
Discount on Notes Payable
1
2
5
0
00
Notes Payable
20
0
0
0
00
Borrowed at a discount
Dec.
Interest Expense
4
9
1
67
Discount on Notes Payable
4
9
1
67
Adjustment for interest
PROBLEM 14A-4
BARRY COMPANY
GENERAL JOURNAL
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Apr.
18
Notes Receivable
13
0
0
0
00
Accounts Receivable – Alex Coates
13
0
0
0
00
Transferred to Notes Receivable
May
9
Allowance for Doubtful Accounts
5
7
0
00
Accounts Receivable – Nicole Mason
5
7
0
00
Wrote off Account
Jul.
17
Cash
13
2
6
0
00
Interest Income
2
6
0
00
Notes Receivable
13
0
0
0
00
Alex Coates paid note
Nov.
11
Accounts PayabIe – Black Co.
8
8
0
0
00
Notes Payable
8
8
0
0
00
Transferred to Notes Payable
15
Accounts Receivable – Nicole Mason
5
7
0
00
Allowance for Doubtful Accounts
5
7
0
00
Reinstate written off account
15
Cash
5
7
0
00
Accounts Receivable – Nicole Mason
5
7
0
00
Collected from customer
Dec.
3
Cash
4
6
8
2
67
Discount on Notes Payable
1
1
7
33
Notes Payable
4
8
0
0
00
Borrowed at a discount
5
Notes Receivable
10
4
0
0
00
Accounts Receivable – Uriah Stone
10
4
0
0
00
Transferred to Notes Receivable
PROBLEM 14A-4 (CONCLUDED)
BARRY COMPANY
GENERAL JOURNAL
PAGE 3
Date
201X
Account Titles and Description
PR
Dr.
Cr.
11
Notes Payable
8
8
0
0
00
Interest Expense
8
0
67
Cash
8
8
8
0
67
Paid Black Co.
16
Notes Receivable
19
0
0
0
00
Accounts Receivable – Baker Co.
19
0
0
0
00
Transferred to Notes Receivable
23
Cash
10
4
1
7
16
Interest Income
1
7
16
Notes Receivable
10
4
0
0
00
Discounted Uriah Stone Note
Dec.
31
Interest Expense
4
1
07
Discount on Notes Payable
4
1
07
Adjustment for interest on discounted
Note Payable
31
Interest Receivable
8
7
08
Interest Income
8
7
08
Adjustment for interest on Note
Receivable
SOLUTIONS TO SET B PROBLEMS
PROBLEM 14B-1
GENERAL JOURNAL
PAGE 1
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Buyer – Reed Co.
June
11
Purchases
9
5
0
0
00
Accounts Payable – Lewis Co.
9
5
0
0
00
Bought on Account
July
11
Accounts Payable – Lewis Co.
4
5
0
0
00
Notes Payable
4
5
0
0
00
Transferred to Notes Payable
Oct.
9
Notes Payable
4
5
0
0
00
Interest Expense
9
0
00
Cash
4
5
9
0
00
Paid off note plus interest
9
Notes Payable
4
5
0
0
00
Interest Expense
9
0
00
Accounts Payable – Lewis Co.
4
5
9
0
00
Dishonored note to Lewis Co.
15
Accounts Payable – Lewis Co.
4
5
9
0
00
Cash
4
5
9
0
00
Paid amount due to Lewis
Seller—Lewis Co.
June
11
Accounts Receivable – Reed Co.
9
5
0
0
00
Sales
9
5
0
0
00
Sold on Account
July
11
Notes Receivable
4
5
0
0
00
Accounts Receivable – Reed Co.
4
5
0
0
00
Transferred to Notes Receivable
Oct.
9
Cash
4
5
9
0
00
Interest Income
9
0
00
Notes Receivable
4
5
0
0
00
Collected note plus interest
PROBLEM 14B-1 (CONCLUDED)
GENERAL JOURNAL
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Oct.
9
Accounts Receivable – Reed Co.
4
5
9
0
00
Interest Income
9
0
00
Notes Receivable
4
5
0
0
00
Dishonored note from Reed
15
Cash
4
5
9
0
00
Accounts Receivable – Reed Co.
4
5
9
0
00
Collected past due amount
from Reed
PROBLEM 14B-2
A.
Maturity Value of the note is $25,406.25.
$25,000 + ($25,000 x 9% x 65/360) = $25,406.25
B.
Number of days the bank will hold the note until maturity date is 15.
C.
Bank discount is $111.15.
$25,406.25 x 10.5% x 15/360 = $111.15
D.
Proceeds are $25,295.10.
$25,406.25 – $111.15 = $25,295.10
BIRD CO.
GENERAL JOURNAL
Date
201X
Account Titles and Description
PR
Dr.
Cr.
June
20
Cash
25
2
9
5
10
Interest Income
2
9
5
10
Notes Receivable
25
0
0
0
00
Discounted Note from Robertson
PROBLEM 14B-3
JOLIOT CO.
GENERAL JOURNAL
PAGE 2
Date
20X1
Account Titles and Description
PR
Dr.
Cr.
June
18
Cash
39
5
3
3
33
Discount on Notes Payable
4
6
6
67
Notes Payable
40
0
0
0
00
Borrowed at a discount
Jul.
18
Interest Expense
4
6
6
67
Notes Payable
40
0
0
0
00
Cash
40
0
0
0
00
Discount on Notes Payable
4
6
6
67
Paid off note
Nov.
2
Cash
32
1
1
2
50
Discount on Notes Payable
2
8
8
7
50
Notes Payable
35
0
0
0
00
Borrowed at a discount
Dec.
31
Interest Expense
6
3
0
97
Discount on Notes Payable
6
3
0
97
Adjustment for interest
PROBLEM 14B-4
DIXEY COMPANY
GENERAL JOURNAL
PAGE 2
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Apr.
18
Notes Receivable
11
0
0
0
00
Accounts Receivable – Frank Hall
11
0
0
0
00
Transferred to Notes Receivable
May
9
Allowance for Doubtful Accounts
5
8
0
00
Accounts Receivable – Joe Halmark
5
8
0
00
Wrote off Account
Jul.
12
Cash
11
2
5
9
72
Interest Income
2
5
9
72
Notes Receivable
11
0
0
0
00
Frank Hall paid note
Nov.
11
Accounts Payable – Crow Co.
8
6
0
0
00
Notes Payable
8
6
0
0
00
Transferred to Notes Payable
15
Accounts Receivable – Joe Halmark
5
8
0
00
Allowance for Doubtful Accounts
5
8
0
00
Reinstate written off account
15
Cash
5
8
0
00
Accounts Receivable – Joe Halmark
5
8
0
00
Collected from customer
Dec.
3
Cash
5
1
6
0
87
Discount on Notes Payable
1
3
9
13
Notes Payable
5
3
0
0
00
Borrowed at a discount
5
Notes Receivable
9
5
0
0
00
Accounts Receivable – Uriah Stone
9
5
0
0
00
Transferred to Notes Receivable
PROBLEM 14B-4 (CONCLUDED)
DIXEY COMPANY
GENERAL JOURNAL
PAGE 3
Date
201X
Account Titles and Description
PR
Dr.
Cr.
Dec.
11
Notes Payable
8
6
0
0
00
Interest Expense
9
6
75
Cash
8
6
9
6
75
Paid Crow Co.
16
Notes Receivable
15
0
0
0
00
Accounts Receivable – Box Co.
15
0
0
0
00
Transferred to Notes Receivable
29
Cash
9
5
6
9
26
Interest Income
6
9
26
Notes Receivable
9
5
0
0
00
Discounted Uriah Stone Note
Dec.
31
Interest Expense
4
3
28
Discount on Notes Payable
4
3
28
Adjustment for interest on discounted
Note Payable
31
Interest Receivable
7
8
13
Interest Income
7
8
13
Adjustment for interest on Notes
Receivable
FINANCIAL REPORT PROBLEM SOLUTION—2013 Kellogg’s Annual Report
Interest Expense
2012 $261 million
2013 235 million
ON THE JOB—Smith Computer Center Solution
Calculation of Due Date
April 20 Days
May 31 Days
June 30 Days
July 31 Days