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Problem
Farwell Company closes its books monthly. On September 30, selected ledger account balances are:
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Notes Receivable
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$31,800
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Interest Receivable
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108
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Notes Receivable include the following.
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Date
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Maker
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Face
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Term
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Interest
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Aug. 16
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K. Goza Inc.
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mce_markernbsp;8,400
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60 days
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6%
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Aug. 25
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Holt Co.
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9,000
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60 days
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5%
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Sept. 30
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Noblitt Corp.
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14,400
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6 months
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7%
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Interest is computed using a 360-day year. During October, the following transactions were completed.
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Oct. 7
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Made sales of $7,000 on Farwell credit cards.
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12
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Made sales of $700 on MasterCard credit cards. The credit card service charge is 3%.
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15
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Added $460 to Farwell customer balances for finance charges on unpaid balances.
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15
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Received payment in full from K. Goza Inc. on the amount due.
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24
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Received notice that the Holt note has been dishonored. (Assume that Holt is expected to pay in the future.)
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Journalize the October transactions and the October 31 adjusting entry for accrued interestreceivable. |
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