Question

Wildhorse Co. 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 $ 24,200. Notes Receivable include the following.

Date		Maker		Face Value		Term		Maturity Date		Interest Rate
April 21		Coote Inc.		$ 4,400		90 days		July 20		7%
May 25		Brady Co.		7,800		60 days		July 24		10%
June 30		BMG Corp.		12,000		6 months		December 31		6%

During July, the following transactions were completed.

July 5		Made sales of $ 4,270 on Wildhorse Co. credit cards.
14		Made sales of $ 500 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.

Answer 1

Date	Account titles & Explanations					Debit	Credit
5-Jul	Accounts receivable					4,270
	sales revenue						4,270
14-Jul	Cash					485
	Service charge expense					15
	Sales revenue						500
20-Jul	Cash					4,477
	interest revenue		(4,400*7%*90/360)				77
	notes receivable						4,400
24-Jul	Cash					7,930
	interest revenue		(7,800*10%*60/360)				130
	notes receivable						7,800
31-Jul	interest receivable		(12000*6%*1/12)			60
	interest revenue						60
		Notes receivable
1-Jul	24,200	20-Jul	4,400
		24-Jul	7,800
31-Jul	12,000
	Account receivable
5-Jul	4,270
31-Jul	4,270
	interest receivable
		31-Jul	60
		31-Jul	60