Lorenz Company closes its books on July 31. On June 30 the Notes Receivable account balance is $23,800. Notes Receivable include the following.
|
Date |
Maker |
Face Value |
Team |
Maturity Date |
Interest Rate |
|
May 21 |
Alger Inc. |
$6,000 |
60 days |
July 20 |
8% |
|
May 25 |
Girard Co. |
$7,800 |
60 days |
July 24 |
10% |
|
June 30 |
LSU Corp. |
$10,000 |
6 months |
December 31 |
9% |
During July the following transactions were completed.
July 5 Made sales of $5,100 on Lorenz credit cards.
July 14 Made sales of $600 on Visa credit cards. The credit card service charge is 3%.
July 20 Received payment in full from Agler Inc. on the amount due.
July 24 Received payment in full from Girard Co. on the amount due.
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 and post the entries to all of the receivable accounts. (Use T accounts.)
(c) Show the balance sheet presentation of the receivable accounts at July 31.