Marty Co. closes its books monthly. On June 30, selected ledger account balances are:
|
Notes Receivable |
$57,000 |
|
Interest Receivable |
420 |
Notes Receivable include the following.
|
Date |
Maker |
Face |
Term |
Interest |
|
May 16 |
Rice Inc. |
$12,000 |
60 days |
10% |
|
May 25 |
Smelter Co. |
30,000 |
60 days |
9% |
|
June 30 |
Kupp Corp. |
15,000 |
6 months |
12% |
During July, the following transactions were completed.
|
July 5 |
Made sales of $7,200 on Marty Co. credit cards. |
|
14 |
Made sales of $1,000 on Visa credit cards.The credit card service charge is 3%. |
|
14 |
Added $510 to Marty Co. credit card customer balances for finance charges on unpaid balances. |
|
15 |
Received payment in full from Rice Inc. on the amount due. |
|
25 |
Received notice that the Smelter Co. note has been dishonored. (Assume that Smelter Co. is expected to pay in the future.) |
Instructions
(a) Journalize the July transactions and the July 31 adjusting entry for accrued interest receivable. (Interest is computed using 360 days.)
(b) Enter the balances at July 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 July 31.