Journal entries for Direct Write off method. Please Help me!!!?

Question

The following series of transactions occured in 2005 and 2006 when Linwood Co. sold merchandise to John Moore. Linwood annual accounting period ends on December 31, interest is calculated using 360 day year.

10/01/05 Sold $12,000.00 merchandise to John Moore, terms 2/10, n/30.
11/15/05 Moore reports he cannot pay the account until early next year. He agrees to a 120 day note at 12%
12/31/05 Prepare adjusting entry to record accrued interest on note.
03/15/06 Linwood recieves a check from Moore for the maturity value(with interest) of the note.
03/22/06 Linwood receives notification that Moore's check is returned for non-sufficient funds(NSF)
12/31/06 Linwood writes off Moore's account as uncollectible.

Prepare journal entries to record transactions using the direct write off method of accounting for uncollectible accounts.

Sandy · Accepted Answer

10/01/05 Sold $12,000.00 merchandise to John Moore 
Dr  Accounts receivable $12,000
Cr  Sales $12,000

11/15/05 Moore reports he cannot pay the account until early next year. He agrees to a 120 day note at 12%
Dr  Note receivable $12,000
Cr  AR $12,000

12/31/05 Prepare adjusting entry to record accrued interest on note
Dr  Interest receivable $200
Cr  Interest income $200

03/15/06 Linwood recieves a check from Moore for the maturity value(with interest) of the note
Dr  Cash $12,500
Cr  Interest income $300
Cr  Note receivable $12,000
Cr  Interest receivable $200

03/22/06 Linwood receives notification that Moore's check is returned for non-sufficient funds(NSF)
Dr  Accounts receivable $12,000
Dr  Interest receivable $500
Cr  Cash $12,500

12/31/06 Linwood writes off Moore's account as uncollectible
Dr  Bad debts written off $12,500
Cr  AR $12,000
Cr  Interest receivable $500

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Journal entries for Direct Write off method. Please Help me!!!?

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