2. Journalize the following transactions:
(a) In our accounts receivable ledger there appears a debit balance in the account of John Smith amounting to $200, and in our accounts payable ledger there is a credit balance to him of $500. We send him a check for the balance due him, taking into consideration the cash discount allowed by us of 2%, and that granted by him of 3%. (The general ledger contains controlling accounts for these two ledgers.)
(b) Henry White owes us on open account $1,000, which is subject to 5% cash discount. He settles his account by giving us a note, which has included in its face interest for six months at 6%.
3. Draw up rough forms of a general journal, sales journal, sales returns and allowances journal, purchase journal, purchase returns and allowances journal, cash book, and note journals, as used in a controlling account system, and make entries of the following transactions therein:
(a) John Norman dishonors a note for $700 which you left at the bank for collection. The bank charges $1.50 protest fees.
(b) Amos Clark returns $50 worth of goods and asks for an allowance of $30 on goods retained. You accept the returned goods and grant the allowance.
(c) C. Cohen is both a customer and a creditor but you desire to carry his account in the creditors ledger only. You sell him a bill of goods, $350.
(d) An error was made last month in crediting customers’ remittances. James Jones was credited for $40 that should have been credited to John Jones. Correct the error.
(e) Settled your account of $800 with D. Flynn, a creditor, by returning goods $60, an allowance for defective goods $30, transferring a note you received from D. Morgan $570, and your check for the balance.
Partnership—Formation