Zimpher Company closes its books on October 31. On September 30 the balance in Interest Receivable is $182.40, and the Notes Receivable account balance is $23,400.

Notes Receivable include the following:

Interest is computed using a 360-day year. During October the following transactions were completed:
Oct. 7 Made sales of $6,900 on Zimpher Credit cards.
12 Made sales of $750 on VISA credit cards. The credit card service charge is 4%.
15 Received payment in full from Foran Inc. on the amount due.
25 Received notice that Drexler Co. note has been dishonored. (Assume that Drexler Co. is expected to pay in future.)
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.

Transcribed Image Text:

Date Maker Aug. 16 Foran Inc. Aug. 25 Drexler Co. Sept. 30 MGH Corp. Face Value $ 8,000 Term 60 days Interest Rate 12% 5,200 2 months 10% 10,200 6 months 8%