The following selected transactions occurred for Kennel Corporation. The company uses a perpetual inventory system, has a May 31 year end, and adjusts its accounts annually. Feb. 1 3 26 Mar. 6 27 Sold merchandise for $8,800 on account (n/30) to Morgan Ltd. The cost of goods sold was $6,600. Sold $13,200 of merchandise costing $8,900 to Gauthier Company and accepted Gauthier's two-month, 7% note in payment. Interest is due at maturity. Sold $13,200 of merchandise to Mathias Corp., terms n/30. The cost of the merchandise sold was $7,800. Sold, on account (n/30), $3,800 of merchandise that cost $3,100 to Superior Limited. Accepted a two-month, 7%, $13,200 note from Mathias in settlement of its account. (See February 26 transaction.) Interest is due at maturity. Collected the Gauthier note in full. (See February 3 transaction.) The Mathias note of March 27 was dishonoured. It is expected that Mathias will eventually pay the amount owed. Recorded accrued interest for three months on outstanding interest on the receivables overdue from Morgan and Superior Interest on unpaid receivables is charged at 24% per annum (2% per month). (See February 1 and March 6 transactions.) Apr. 3 May 27 31 Date Account Titles and Explanation Debit Credit Credit (To record sales) (To record cost of merchandise sold) (To record sales (To record cost of merchandise sold) > (To record note dishonoured) (To record interest accrued on outstanding accounts receivable amount)