The Following Series of Transactions Occurred During Year 1 and Year

question 113

Essay

The following series of transactions occurred during Year 1 and Year 2, when Foxworth
Co. sold merchandise to Kevin Lewis. Foxworth's annual accounting period ends on December 31.
10/01/Yr 1 Sold $12,000 of merchandise to K. Lewis, terms 2/10, n/30.
11/15/Yr 1 Lewis reports that he cannot pay the account until early next year. He agrees to exchange the account for a 120-day, 12% note receivable.
12/31/Yr 1 Prepared the adjusting journal entry to record accrued interest on the note.
03/15/Yr 2 Foxworth receives a check from Lewis for the maturity value (with interest) of the note. 03/22/Yr 2 Foxworth receives notification that Lewis' check is being returned for nonsufficient funds (NSF).
12/31/Yr 2 Foxworth writes off Lewis' account as uncollectible.
Prepare Foxworth Co.'s journal entries to record the above transactions. The company uses the
allowance method to account for its bad debt expense.

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Definitions:

Whole Grains

Grains that contain all essential parts and naturally-occurring nutrients of the entire grain seed, offering health benefits over refined grains.

Saturated Fat

A type of fat found in animal products and some plant oils, known for raising cholesterol levels and potentially increasing heart disease risk.

MyPlate

A visual guide created by the U.S. Department of Agriculture to help Americans understand and follow healthy eating patterns, consisting of portions from different food groups.

DASH Food Plan

Dietary Approaches to Stop Hypertension; a diet plan promoting the reduction of blood pressure through healthy eating, focusing on low-sodium, high-fiber foods, and a variety of nutrients.