Date Maker Face Term Interest Journalize the October transactions and the Octobe
ID: 2455196 • Letter: D
Question
Date
Maker
Face
Term
Interest
Journalize the October transactions and the October 31 adjusting entry for accrued interest receivable.Enter the balances at October 1 in the receivable accounts. Post the entries to all of the receivable accounts.Show the balance sheet presentation of the receivable accounts at October 31
Farwell Company closes its books monthly. On September 30, selected ledger account balances are:Notes Receivable $36,000 Interest Receivable 243
Notes Receivable include the following.
Date
Maker
Face
Term
Interest
Aug. 16 K. Goza Inc. $ 10,800 60 days 10% Aug. 25 Holt Co. 12,000 60 days 9% Sept. 30 Noblitt Corp. 13,200 6 months 11%Interest is computed using a 360-day year. During October, the following transactions were completed.
Oct. 7 Made sales of $6,900 on Farwell credit cards. 12 Made sales of $900 on MasterCard credit cards. The credit card service charge is 2%. 15 Added $460 to Farwell customer balances for finance charges on unpaid balances. 15 Received payment in full from K. Goza Inc. on the amount due. 24 Received notice that the Holt note has been dishonored. (Assume that Holt is expected to pay in the future.)
Explanation / Answer
Solution:
Journalize the Entries:
(A).
Cash 6,900
Sales 6,900
( To Record the Sales )
(B).
Cash 9,180
Sales 9,000
Charges 180
( To Record the Sales with Charges)
(C).
Finance Charges 460
Cash 460
( To Record the Finance Charges)
(D).
Cash 837
Accounts Receivables 837
( Due Amount Received)
(E).
Notices 12,000
Accounts Payables 12,000
(Notice Rceived)
(A)1.
Notes Receivables 36,000
Account Receivable 36,000
(B). K .GOZA Inc
Cash 11,391.7
Notes Rceivables 10,800
Interest Income 591.7
( Note: 36,000 * 10% *60Days / 365Days = 591.7)
(C). Holt Co.
Cash 12,532.6
Notes Receivables 12,000
Interest Income 532.6
( Note: 36,000 * 9% * 60 Days / 365 Days = 532.6)
(D). Nobillt Corp.
Cash 15,152.8
Notes Receivables 13,200
Interest Income 1,952.8
( Note: 36,000 * 11% * 6 Months / 365 Days = 1,952.8)
(B)1.
Interest Receivables 243
Accounts Receivables 243
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