Question

In: Accounting

Durhan Company closes its books on October 31. On September 30, the Notes Receivable account balance...

Durhan Company closes its books on October 31. On September 30, the Notes Receivable account balance is $22,800. Notes Receivable include the following.

Date

Maker

Face Value

Term

Maturity Date

Interest Rate

Aug. 16

Stuhmer Inc.

$10,000

60 days

Oct. 15

6%

Aug. 25

Moberg Co.

3,000

2 months

Oct. 25

7%

Sept. 30

Earnest Corp.

9,800

6 months

Mar. 30

6%

Interest is computed using a 360-day year. During October, the following transactions were completed.

Oct. 7

Made sales of $4,600 on Durhan credit cards.

12

Made sales of $600 on Visa credit cards. The credit card service charge is 3%.

15

Received payment in full from Stuhmer Inc. on the amount due.

25

Received payment in full from Moberg Co. on amount due.

Instructions

(a) Journalize the October transactions and the October 31 adjusting entry for accrued interest receivable. (Interest is computed using 360 days; omit cost of goods sold entries.)

(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, 2018.

Solutions

Expert Solution

Ans-1

ASSUMED NO ENTRIES FOR ACCRUED INTEREST HAVE BEEN DONE TILL OCT END

WORKING TABLE

Ans-(a)

JOURNAL ENTRIES

Ans-(b)

Ans-(c )


Related Solutions

In each of the following independent cases, the company closes its books on December 31. Windsor...
In each of the following independent cases, the company closes its books on December 31. Windsor Co. sells $511,000 of 10% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2023. The bonds yield 12%. Give entries through December 31, 2021. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end....
In each of the following independent cases, the company closes its books on December 31. Bridgeport...
In each of the following independent cases, the company closes its books on December 31. Bridgeport Co. sells $491,000 of 8% bonds on March 1, 2017. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2020. The bonds yield 12%. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places,...
Management Group, Inc., adjusts and closes its books each month. The trial balance at March 31,...
Management Group, Inc., adjusts and closes its books each month. The trial balance at March 31, 2017 before adjustments is as follows: Debit Credit Cash.......................................... 26,650 Accounts Receivable................. 30,000 Supplies..................................... 3,750 Prepaid Advertising................... 8,400 Equipment................................ 72,000 Accumulated Depreciation: Equipment 25,000 Unearned Consulting Fees............ 19,500 Capital Stock....................... 20,000 Retained Earnings................... 26,500 Consulting Fees Earned.............. 87,500 Salaries Expense.................... 32,000 Utilities Expense................... 1,200 Rent Expense........................ 4,500 _______ 178,500 178,500 ======= ======== The following information relates to month-end adjustments: a According to contracts, consulting...
Milton Company closes its books on its July 31 year-end. The company does not make entries...
Milton Company closes its books on its July 31 year-end. The company does not make entries to accrue for interest except at its year-end. On June 30, the Notes Receivable account balance is $23,800. Notes Receivable include the following. date Maker Face Value Term Maturity Date Interest Rate April 21 Coote Inc 6,000 90 Days July 20 8% May 25 Brady Co 7,800 60 Days July 24 10% June 30 BMG Co 10,000 6 Months December 31 6% During July,...
a.)On December 31, 2019, the Notes Receivable account at P. Davis Materials Corporation had a balance...
a.)On December 31, 2019, the Notes Receivable account at P. Davis Materials Corporation had a balance of $12,000, which represented a six-month, 12 percent note received from a customer on October 1. b. ) During the week ended June 7, 2019, McCormick Media received $32,000 from customers for subscriptions to its magazine Modern Business. On December 31, 2019, an analysis of the Unearned Subscription Revenue account showed that half of the subscriptions were earned in 2019. C.) On November 1,...
Kingbird, Inc. closes its books on its July 31 year-end. The company does not make entries...
Kingbird, Inc. closes its books on its July 31 year-end. The company does not make entries to accrue for interest except at its year-end. On June 30, the Notes Receivable account balance is $ 26,600. Notes Receivable include the following. Date Maker Face Value Term Maturity Date Interest Rate April 21 Coote Inc. $ 5,600 90 days July 20 8% May 25 Brady Co. 9,000 60 days July 24 10% June 30 BMG Corp. 12,000 6 months December 31 8%...
Preparing Adjusting Journal Entries Pacific Company adjusts and closes its books each December 31. It is...
Preparing Adjusting Journal Entries Pacific Company adjusts and closes its books each December 31. It is now December 31, 2020, and the following information is available for preparing accounting adjustments. The Accounts Receivable balance at December 31 is $6,400. The company estimates that 5% of receivables will not be collected. (Assume a zero beginning balance in Allowance for Doubtful Accounts.) Unpaid and unrecorded salaries incurred at December 31 are $960. The company paid a two-year insurance premium in advance on...
Abbot Equipment Repair has a September 30 year end. The company adjusts and closes its accounts...
Abbot Equipment Repair has a September 30 year end. The company adjusts and closes its accounts on an annual basis. On August 31, 2021, the account balances of Abbot Equipment Repair were as follows: ABBOT EQUIPMENT REPAIR Trial Balance August 31, 2021 ​​​​​​​​Debit ​​Credit Cash ​ ​​​​​​​$ 2,790 ​ ​ Accounts receivable ​​​​​​ 7,910 ​ Supplies ​​​​​​​ 8,500 ​ Equipment ​​​​​​​ 9,000 ​ Accumulated depreciation—equipment ​​​​​​$ 1,800 Accounts payable ​​​​​​​​ 3,100 Unearned revenue ​​​​​​​​ 400 J. Abbot, capital ​​​​​​​​ 21,200...
At December 31, 2019, Bedford Company had a balance of $248,100 in its Accounts Receivable account...
At December 31, 2019, Bedford Company had a balance of $248,100 in its Accounts Receivable account and a credit balance of $900 in its Allowance for Doubtful Accounts account. Bedford analyzed and aged its accounts receivable based on the following estimated uncollectible amounts: Age of Accounts Receivables Balance Estimated % Uncollectible Current $ 130,500 0.6% 31 to 60 day 66,300 2.0% 61 to 90 days 26,700 5.5% Over 91 days    24,600 21.0% Total $248,100 The company bases its provision...
At December 31, 2017, Engel Company had a balance of $770,000 in its Accounts Receivable account...
At December 31, 2017, Engel Company had a balance of $770,000 in its Accounts Receivable account and an unused balance of $7,000 in its Allowance for Doubtful Accounts.  The company then analyzed and aged its accounts receivable as follows:             Current                                                           $468,000             1-60 days past due                                           244,000             61-180 days past due                                        38,000             Over 180 days past due                                     20,000                                                                                     ------------- Total accounts receivable                                         $770,000                                                                                     ======== In the past, the company experienced losses as follows:  1% of current balances, 5% of balances 1-60 days past due, 15% of balances 61-180...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT