Weldon Corporation’s fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2021:
Mar. 17 of $1,700 were written off as uncollectible. The company uses the allowance method.
30 Loaned an officer of the company $20,000 and received a note requiring principal and interest at 7% to be paid on March 30, 2022.
May 30 Discounted the $20,000 note at a local bank. The bank’s is 8%. The note was discounted without recourse and the sale criteria are met.
June 30 Sold merchandise to the Blankenship Company for $12,000. Terms of the sale are 2/10, n/30. Weldon uses the gross method to account for cash discounts.
July 8 The Blankenship Company paid its account in full.
Aug. 31 Sold stock in a nonpublic company with a book value of $5,000 and accepted a $6,000 noninterestbearing note with a of 8%. The $6,000 payment is due on February 28, 2022. The stock has no ready market value.
Dec. 31 Weldon estimates that the allowance for uncollectible accounts should have a balance in it at year-end equal to 2% of the gross balance of $700,000. The allowance had a balance of $12,000 at the start of 2021.
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1. Prepare journal entries for each of the above transactions (round all calculations to the nearest dollar).
2. Prepare any additional year-end adjusting entries indicated.