Exam 14: Notes Receivable and Notes Payable

Melon Industries issues a $20,000, 10%, 135-day note to Apple Communications. Interest on the note is _________ and the maturity value is __________. (Use a 360-day year. Do not round any intermediate calculations. Round your final answers to the nearest dollar.)

Indicate the account(s) to be debited and credited to record the following transactions. -Paying the principal plus accrued interest. 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

Barrel Enterprises was unable to collect a $1,900 note receivable plus $80 interest on the maturity date, but hoped to collect the amount in the future. Barrel Enterprises should record this event on the maturity date as:

Jane borrowed $1,000 from West Bank and signed a promissory note. West Bank is:

A $5,600, 8% note dated May 20 for 78 days was discounted on June 23 at 14%. The amount of the discount (using a 360-day year) is: (Do not round any intermediate calculations. Round your final answer to the nearest cent.)

The proceeds received from discounting a note could be more than the face value.

What is the debtor's entry to record a note paid, with interest accrued in the previous year (assume there is no reversing entry)?

An adjustment that must be made for the accrued interest on a note receivable would include a:

The formula for calculating interest on a note is: principal × rate × time.

The discount period is the amount of time the bank holds a note that was discounted until the maturity date.

A note is also called a promissory note.

The principal amount on a $1,800, 4%, 60-day promissory note is: (Do not round any intermediate calculations. Round your final answer to the nearest cent.)

The discount period on a discounted note is:

Ross, immediately after receiving a note from a customer, discounted it at the bank and received the proceeds. Ross's entry on his books would include a:

Prepare general journal entries for Huckabee Corporation for the following transactions: 201X

For notes payable issued in one period and due in the next period, accrued interest payable must be recorded at the beginning of the next period.

Prepare journal entries for the following transactions for Design Imports. a) Purchased $7,800 of merchandise (perpetual inventory method) from Serial Material Company on account. b) Gave Serial Material Company a 120-day, 5% note in settlement of the account payable. c) Design Imports defaulted on its note on the maturity date. d) Design Imports paid the previously defaulted note plus $115 additional interest.

Indicate the account(s) to be debited and credited to record the following transactions. -A promissory note received in granting a time extension to a charge customer. Debit ________ Credit ________

Prepare journal entries for the following transactions for Mission Company: June 1 Purchased equipment from Carry, Inc. for $9,400, giving a 3-month, 10% note Sept. 1 Paid amount due on note

When a commercial bank discounts a note on the date of issue, the interest is deducted when the note matures.