Exam 14: Notes Receivable and Notes Payable

Scott Moore is considering accepting a $10,000,60-day,12% promissory note from Cory Gregor to extend additional time to settle a past-due account.Discuss some of the reasons why Moore would accept a promissory note from Cory Gregor.

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). - Column 1 Column 2 Column 3 Column 4 Accounts payable

A promissory note received for granting a time extension to a charge customer would have which effect on the categories?

The proceeds from discounting a note receivable are the:

For the maker,being given additional time to settle an account with issuance of a note results in a shift of:

Interest calculated for one year on a $5,000,8% promissory note is:

Prepare journal entries for the following transactions for Grant Company: $\text {May 1}$ $\quad$$\text {Purchased equipment from Krox, Inc. for \$ 2,060 giving a 2-month \(6 \%\) note}$ $\text {July I}$ $\quad$ $\text {Paid amount due on rote}$

Given the following accounts: [1] Cash [2] Notes receivable [3] Accounts receivable [4] Interest receivable [5] Notes payable [6] Accounts payable [7] Interest payable [8] Discount on notes payable [9] Interest expense [10] Interest income [11] Sales 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 ________ & ________

An adjustment that must be made for the accrued interest on a note receivable is to:

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 be to:

Why is the effective rate of interest always higher than the interest rate of the loan on a discounted note?

Given a 360-day year,the interest expense on a $7,300,8%,77-day promissory note payable is:

Smyth Company borrows $5,000 by giving the bank its own 8%,90-day note.The bank discounts the interest.The effective interest rate is

An adjustment that must be made for the accrued interest on a note payable is to:

A $6,500,12% note dated April 23 for 88 days was discounted on June 2 at 14%.The number of days in the discount period is:

The maturity value of a $3,000,12%,6-month note is:

When Major endorsed customer Minor's note to Story County Bank,Major agreed to pay the note at maturity if Minor failed to pay.Major's liability is a(n):

Warner Enterprises was unable to collect a $1,000 note receivable plus $60 interest on the maturity date,but hoped to collect the amount in the future.Warner should record this as:

Bill's Bikes discounts a 90-day,8%,$4,000 note at a bank at 12%.The discount period is 50 days.It records the proceeds as:

A $6,500,12% note dated April 23 for 88 days was discounted on June 2 at 14%.The amount of the discount (using a 360-day year)is: