Kolton Company closes its books on its July 31 year-end. The company does not ma
ID: 2446347 • Letter: K
Question
Kolton Company closes its books on its July 31 year-end. The company does not make entries to accrue for interest except at its year-end. On June 30, the Notes Receivable account balance is $24,000. Notes Receivable include the following.
Date. Maker. Face Value. Term. Maturity Date. Interest Rate.
Apr 21. Booth Inc. 4,800. 90 days. July 20. 9%
May 25. Manning Co. 7,200. 60 days. July 24. 10%
June 30. ANF Corp. 12,000. 6 months. Dec 31. 7%
During July, the following transactions were completed.
July 5. Made sales of $4,000 on Kolton credit cards
July 14. Made sales of $500 on Visa credit cards. The credit card service charge is 4%
July 20. Recieved payments in full from Booth Inc. on the amount due.
July 24. Recieved payment in full from Manning Co. on the amount due.
1. Journalize the July transactions and the July 31 adjusting entry for accrued interest receivable. (Interest is computed using 360 days; omit cost of goods sold entries.)
2. Enter the balances at July 1 in the receivable accounts and post the entries to all of the receivable accounts.
3. Show the balance sheet presentation of the receivable accounts at July 31.
Explanation / Answer
Kolton Company closes its books on its July 31 year-end. The company does not ma
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