Exam 14: Notes Receivable and Notes Payable

Interest due on a $21,000, 4%, 125-day note is: (Use a 360-day year. Do not round any intermediate calculations. Round your final answer to the nearest dollar.)

The basic formula for calculating the interest on a note is:

Paying the principal on a note plus interest would:

Interest due on a $7,000, 10%, 9-month note is:

Why is it necessary to adjust Interest Expense and Interest Income?

The adjusting entry for accrued interest on a notes receivable would include:

Aaron Company borrows $4,000 by giving the bank its own 8%, 90-day note. The bank discounts the interest. The effective interest rate is: (Use a 360-day year. Do not round any intermediate calculations. Round your final answer two decimal places, X.XX%.)

Bill's Bikes discounts a customer's 90-day, 8%, $3,000 note at a bank at 12%. The discount period is 45 days. It records the proceeds as: (Use a 360-day year. Do not round any intermediate calculations. Round your final answers to the nearest dollar.)

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement that the account in which the account balance is reported, and in Column 4 the account's nature (temporary/permanent). -

The amount the bank charges when it discounts a note is calculated as:

The due date of a promissory note is known as the:

The maturity value for a $10,000, 72-day note at 7% interest is $10,140.

Indicate the account(s) to be debited and credited to record the following transactions. -Accrued interest on a note payable. Debit ________ Credit ________ A)Cash B) Notes receivable C)Accounts receivable D) Interest receivable E)Notes payable F) Accounts payable G)Interest payable H) Discount on notes payable I) Interest expense J) Interest income K) Sales

The interest payment for a $24,000, 84-day note at 8% interest is $24,448.

If a buyer pays off an interest-bearing note at maturity, Interest Income would increase for the buyer.

Delivery Plus discounts its own 120-day, 8%, $40,000 notes receivable. It records the proceeds as: (Use a 360-day year. Do not round any intermediate calculations. Round your final answer to the nearest dollar.)

On November 6, an 8%, 90-day, $3,000 note was accepted by Carmen in exchange for merchandise. What entry does Carmen make on December 31 to recognize the interest? (Use a 360-day year. Do not round any intermediate calculations. Round your final answer to the nearest cent.)

________ is a current liability and ________ is a current asset on the balance sheet.

Interest calculated for one year on a $10,000, 6% promissory note is:

What is the holder of the note's entry to record a note received, with interest accrued in the previous year (assume there is a reversing entry)?