Kolton Company closes its books on its July 31 year-end. The company does not ma
ID: 2709600 • Letter: K
Question
Kolton 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 $24,400. Notes Receivable include the following. During July, the following transactions were completed. July 5 Made sales of $4,400 on Kolton credit cards. 14 Made sales of $600 on Visa credit cards. The credit card service charge is 3%. 20 Received payment in full from Booth Inc. on the amount due. 24 Received payment in full from Manning Co. on the amount due. 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.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries n the order presented n the problem.) Enter the balances at July 1 in the receivable accounts and post the entries to all of the receivable accounts. (Post entries in the order of journal entries posted in the previous part.) Show the balance sheet presentation of the receivable accounts at July 31.Explanation / Answer
Answer:
During July the following transactions were completed.
July 5 Made sales of $4400 on Kolton credit cards.
Dr Accounts Receivable 4400
Cr Sales 4400
July 14 Made sales of $600 on Visa credit cards. The credit card service charge is 3%.
*Note: Bank cards are considered same as cash.
Dr Cash 582
Dr Service Fee Expense 18 (600 x 3%)
Cr Sales 600
July 20 Received payment in full from Booth Inc. on the amount due.
Dr Cash 4,070
Cr Notes Receivable 4,000
Cr Interest Revenue 70
July 24 Received payment in full from Manning Co. on the amount due.
Dr Cash 7,356
Cr Notes Receivable 7,200
Cr Interest Revenue 156
July 31
Dr Interest Receivable 77
Cr Interest Revenue 77
Show the balance sheet presentation of the receivable accounts at July 31.
Date Maker Face value Term Maturity date Interest date Accrued interest 21-Apr Booth inc. 4000 90 days 20-Jul 7% 70 25-May Manning co. 7200 60 days 24-Jul 13% 156 30-Jun ANF Corp. 13200 6 Months 31-Dec 7% 77Related Questions
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