Q2-18_ King Kong Co (KKC)

Q2-18_ King Kong Co (KKC)
Q2-18 Marking guide Q2-18 8% Accounting for bad
debts, bill receivable, dishonoured bills and accrued interest revenue
Following are some selected transactions of King Kong Co
(KKC). Reporting date is 31 December. KKC makes adjusting entries to accrue interest
and bad debt expenses using Allowance method.
2013
July 1 Sold goods to Ping Pong Co (PPC), receiving a $120
000, 9- month , 9% bill. Ignore cost of sales.
Dec 31 Made an adjusting entry to accrue interest on the PPC bill
Dec 31 The ageing schedule shows that $35,500 of accounts receivable
will not be collected. The credit balance in Allowance for doubtful debts is
$20,100.
2014
Apr 1 Collected the maturity value of the PPC
bill.
Jun 23 Sold merchandise to ABC Supplies, receiving a 60 day, 10% bill for
$27 000. Ignore cost of sales.
Aug 22 ABC Supplies dishonored (failed to pay) its bill at maturity; we
converted the maturity value of the bill to an account receivable
Nov 16 Loaned $35 000 cash to Triple C, receiving a 90 day, 12% bill.
Dec 5 Collected in full on account from ABC Supplies
Dec 31 Accrued the interest on the Triple C bill
Requirement
Record the transactions in the journal of King Kong Co (KKC). Explanations not
required.