Question

In: Accounting

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, the following transactions were completed.
July 5 Made sales of $4,500 on Milton credit cards.

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

20 Received payment in full from Coote Inc. on the amount due.
24 Received payment in full from Brady 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; omit cost of goods sold entries.)

(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.



Solutions

Expert Solution

ekkarill92 answered 1 year ago
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