Smothers Corporation sold goods to Ray Inc. for $$90,000$ on October $1,2025,$ accepting

Ray's $$90,000,6-$month, $4\%$ note.

Required:

Prepare Smothers October $1$ entry assuming that Smothers uses a periodic inventory system,

December $31$ annual adjusting entry, and April $1$ entry for the collection of the note and

interest.

On October $1,2025,$ Grant Inc. assigns $$2,000,000$ of its accounts receivable to Omma

National Bank as collateral for a $$1,500,000$ note. The bank assesses a finance charge of

$2\%$ of the receivables assigned and interest on the note of $7\%.$

Required:

Prepare the October $1$ journal entries for both Grant and Omma.

Chapter $7$

Martin Manufacturing Company has the following account balances at year$-$end:

What amount should Martin report for inventories in its balance sheet?