Prepare journal entries to record the transactions assuming

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Reference no: EM132380104

Question

March 14 Sole of Merchandise, P2,050,000 to a customer, FOB destination 2/10, n/30.April 7 Receipt of a 60-day, 12% note dated April 5 from the customer. The face of the note was the amount of the invoice minus freight charge of P50,000 paid by the customer in connection with the March 14 sale.

April 20 The note of the customer was discounted with the bank at 15%.

June 4 Receipt of notification from bank that the customer dishonored the note. Accordingly, the entity paid the bank the amount due including protest fee and other charges of P10,000

July 4 Receipt of cash from the customer for the full amount of indebtedness plus interest on the original face value.

REQUIRED:

Prepare journal entries to record the transactions assuming any discounting of note receivable is accounted for as a conditional sale with recognition of a contingent liability.

Reference no: EM132380104

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