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Question 4 Farwell Company closes its books monthly. On September 30, selected ledger account balances are: Notes Receivable $138,000 Interest Receivable 1,752 Notes Receivable include
Question 4
Farwell Company closes its books monthly. On September 30, selected ledger account balances are:
Notes Receivable | $138,000 | |
Interest Receivable | 1,752 |
Notes Receivable include the following.
Date | Maker | Face | Term | Interest | ||||
Aug. 16 | K. Goza Inc. | $ 108,000 | 60 days | 12% | ||||
Aug. 25 | Holt Co. | 12,000 | 60 days | 11% | ||||
Sept. 30 | Noblitt Corp. | 18,000 | 6 months | 13% |
Interest is computed using a 360-day year. During October, the following transactions were completed.
Oct. 7 | Made sales of $6,900 on Farwell credit cards. | |
12 | Made sales of $900 on MasterCard credit cards. The credit card service charge is 1%. | |
15 | Added $460 to Farwell customer balances for finance charges on unpaid balances. | |
15 | Received payment in full from K. Goza Inc. on the amount due. | |
24 | Received notice that the Holt note has been dishonored. (Assume that Holt is expected to pay in the future.) |
Journalize the October transactions and the October 31 adjusting entry for accrued interest receivable.
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