On May 2, McLain Company lends $9,000 to Chang, Inc., issuing a 6-month, 9% not. at the maturity date, November 2, Chang indicates that it cannot pay.
- Prepare the entry to record the issuance of the note.
- Prepare the entry to record the dishonor of the note, assuming that McLain Company expects collection will occur.
- Prepare the entry to record the dishonor of the note, assuming that McLain Company does not expect collection in the future.
Kerwick Company had accounts receivable of $100,000 on January 1, 2020. the only transactions that affected accounts receivable during 2020 were net credit sales of $1,000,000, cash collections of $920,000, and accounts written off of $30,000.
- Compute the ending balance of accounts receivable.
- Compute the accounts receivable turnover for 2020.
- Compute the average collection period in days.