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 balance 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.