Exam 14: Notes Receivable and Notes Payable

An adjustment that must be made for the interest on a note payable that is incurred during the period but not paid or recorded because payment is not due is called:

An advantage of a promissory note receivable over an account receivable is that it:

The maker is the party to whom the note is payable.

The discount period begins when the note is discounted and ends with the maturity date.

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

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

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). -

How would you compute the accrued interest expense on December 31 for a $5,000 note payable for 73 days at 8% interest dated November 22?

Brooke Company grants James Decorating additional time to pay its past due account. James makes a written promise to pay Brooke the amount on a certain date. James records this transaction as follows:

The journal entry to record the payment of a discounted note at maturity is a debit to Notes Payable and Interest Expense, and a credit to Cash.

A 90-day note dated July 9 would be due on October 9.

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