Notes Receivable $33,000 Interest Receivable $ 170 Date Maker Face Term Interest

Question

Notes Receivable $33,000 Interest Receivable $   170 Date Maker Face Term Interest Aug. 16 Chang Inc. $ 8,000 60 days 8% Aug. 25 Hughey Co.   9,000 60 days 10% Sept. 30 Skinner Corp. 16,000 6 months 9% Oct. 7 Made sales of $6,900 on Mendosa credit cards. 12 Made sales of $900 on MasterCard credit cards. The credit card service charge is 3%. 15 Added $460 to Mendosa customer balances for finance charges on unpaid balances. 15 Received payment in full from Chang Inc. on the amount due. 24 Received notice that the Hughey note has been dishonored. (Assume that Hughey is expected to pay in the future.) Instructions (a)   Journalize the October transactions and the October 31 adjusting entry for accrued interest receivable. (b)   Enter the balances at October 1 in the receivable accounts. Post the entries to all of the receivable accounts. (c)   Show the balance sheet presentation of the receivable accounts at October 31. Mendosa Company closes its books monthly. On September 30, selected ledger account balances are: Notes Receivable $33,000 Interest Receivable $   170 Notes Receivable include the following. Date Maker Face Term Interest Aug. 16 Chang Inc. $ 8,000 60 days 8% Aug. 25 Hughey Co.   9,000 60 days 10% Sept. 30 Skinner Corp. 16,000 6 months 9% Interest is computed using a 360-day year. During October, the following transactions were completed. Oct. 7 Made sales of $6,900 on Mendosa credit cards. 12 Made sales of $900 on MasterCard credit cards. The credit card service charge is 3%. 15 Added $460 to Mendosa customer balances for finance charges on unpaid balances. 15 Received payment in full from Chang Inc. on the amount due. 24 Received notice that the Hughey note has been dishonored. (Assume that Hughey is expected to pay in the future.) Hint: Prepare entries for various notes receivable transactions.
(SO 2, SO 4, SO 5, SO 8 and SO 9)

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