In: Accounting
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.
Ans-1
ASSUMED NO ENTRIES FOR ACCRUED INTEREST HAVE BEEN DONE TILL OCT END
WORKING TABLE
Ans-(a)
JOURNAL ENTRIES
Ans-(b)
Ans-(c )