Question

Lynn Company has accounts receivable of $54,000 in its general ledger at July 31: During August,...

Lynn Company has accounts receivable of $54,000 in its general ledger at July 31: During August, the following transactions occurred.

Aug. 1      Added 1% finance charges to $15,000 of credit card balances for not paying within the 30 day grace period.

        15      Sold $28,000 of accounts receivable to Coal Factors Inc. who charge a 3% commission.

        28      Collected $6,000 from Lynn credit card customers including $300 of finance charges previously billed.

Instructions

(a)   Journalize the transactions.

(b)   Indicate the statement presentation of interest revenue and service charges.

Business   Accounting   
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