Prepare journal entries to record johnsons transactions

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Reference no: EM133928380

Problem

Johnson Co. began operations on January 1, 2025. During the next 2 years, they completed a number of transactions involving credit sales, accounts receivable collections and bad debts. The transactions are summarized as follows (assume a perpetual inventory system):

2025

January 26 Merchandise that cost $608,000 was sold for $776,000 under credit terms of n/30.

June 13 Wrote off uncollectible accounts receivable in the amount of $16,000.

December 19 Received cash of $520,000 in payment of outstanding accounts receivable.

December 31 In adjusting the accounts on December 31, concluded that 2.0% of the outstanding accounts receivable would become uncollectible.

2026

March 26 Johnson Co. sold merchandise for $1,144,000 under credit terms of n/60. The merchandise had cost $896,000.

August 15 Wrote off uncollectible accounts receivable in the amount of $24,000.

November 22 Payments of outstanding accounts received totaled $560,000. Get the instant assignment help.

December 31 While accounts were being adjusted on December 31, it was concluded that 2.0% of the outstanding accounts receivable would become uncollectible.

Task

Prepare journal entries to record Johnson's 2025 and 2026 summarized transactions, and the adjusting entries to record bad debt expense at the end of each year (December 31).

Reference no: EM133928380

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