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Question
The following series of transactions occurred during 2014 and 2015 when Linwood Co. sold merchandise to John Moore. Linwood's annual accounting period ends on December 31.
| 10/01/14 | Sold $12,000 of merchandise to John Moore, terms 2/10, n/30. |
| 11/15/14 | Moore reports that he cannot pay the account until early next year. He agrees to exchange the account for a 120-day, 12% note receivable. |
| 12/31/14 | Prepared the adjusting journal entry to record accrued interest on the note. |
| 03/15/15 | Linwood receives a check from Moore for the maturity value (with interest) of the note. |
| 03/22/15 | Linwood receives notification that Moores check is being returned for non-sufficient funds (NSF). |
| 12/31/15 | Linwood writes off Moores account as uncollectible. |
Prepare Linwood Co.'s journal entries to record the above transactions assuming they use the allowance method of accounting for uncollectible accounts.
Answer
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