Kolton Company closes its books on its July 31 year-end. The company does not ma

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 $23,800. Notes Receivable include the following. During July, the following transactions were completed. Made sales of $5,300 on Kolton credit cards. Made sales of $600 on Visa credit cards. The credit card service charge is 4%. 20 Received payment in full from Booth Inc. on the amount due. 24 Received payment in full from Manning Co. on the amount due. 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.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Rec journal entries In the order presented in the problem.)

Explanation / Answer

Date Accounts and Explanations Debit Credit 5-Jul Accounts receivable 5300               Sales 5300 14-Jul cash 576 Service fee expense(600*4%) 24                            sales 600 5-Jul cash 5304          notes receivable 5200 interest revenue 104 25-May cash 7956          notes receivable 7800 interest revenue 156

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