Brown Company closes its books on October 31. On September 30 the Notes Receivable account balance is $20,200. Notes Receivable include the following.
|
Date |
Maker |
Face Value |
Term |
Maturity Date |
Interest Rate |
|
Aug. 16 |
Foran Inc. |
$ 7,000 |
60 days |
Oct. 15 |
9% |
|
Aug. 25 |
Marsh Co. |
3,000 |
2 months |
Oct. 25 |
7% |
|
Sept. 30 |
Flagg Corp. |
10,200 |
6 months |
Mar. 30 |
8% |
Interest is computed using a 360 day year. During October the following transactions were completed.
|
Oct. |
7 |
Made sales of $4,600 on Brown credit cards. |
|
12 |
Made sales of $600 on Visa credit cards. The credit card service charge |
|
|
15 |
Received payment in full from Foran Inc. on the amount due. |
|
|
25 |
Received payment in full from Marsh Co. on amount due. |
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 and post the entries to all of the receivable accounts. (Use T accounts.)
(c) Show the balance sheet presentation of the receivable accounts at October 31.