Question: Milton Company closes its books on its July 31 year-end. The company does not make entries to accrue for interest except at its year-end. On June 30, the Notes Receivable account balance is $23,800. Notes Receivable include the following
During July, the following transactions were completed.
July 5 Made sales of $4,500 on Milton credit cards.
14 Made sales of $600 on Visa credit cards. The credit card service charge is 3%.
20 Received payment in full from Coote Inc. on the amount due.
24 Received payment in full from Brady Co. on the amount due.
Instructions: (a) Journalize the July transactions and the July 31 adjusting entry for accrued interest receivable. (Interest is computed using 360 days; omit cost of goods sold entries.)
(b) Enter the balances at July 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 July 31.