Question
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
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.
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