Question 1

When an account receivable is exchanged for a note receivable,a shift in equity occurs.

Accepted Answer

A) True 
 B)False  False

Question 2

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:

Accepted Answer

A)  debit to Cash.
B)  credit to Interest Income.
C)  credit to Notes Receivable.
D)  All of the above D

Question 3

A $5,500,10% note dated May 20 for 78 days was discounted on June 23 at 12%.The number of days in the discount period is:

Accepted Answer

A)  78 days.
B)  39 days.
C)  44 days.
D)  some other number. C

Question 4

Betty's Boutique discounts its own 150-day,9%,$20,000 note payable at a bank.It records the proceeds as:

Accepted Answer

A)  debit Cash $19,250;debit Discounts on Notes Payable $750;credit Notes Receivable $20,000.
B)  debit Cash $19,250;credit Discounts on Notes Payable $750;credit Notes Payable $20,000.
C)  debit Cash $18,200;debit Discount on Notes Payable $1,800;credit Notes Payable $20,000.
D)  debit Cash $19,250;credit Notes Payable $19,250.

Question 5

On March 15,Ben Jones negotiated a $25,000 bank loan for 270 days at an interest rate of 8%.
Required (show your calculations):
a)Determine the due date of the note.
b)Calculate the amount of interest charged by the bank.
c)Calculate the maturity value of the note.

Accepted Answer

The answer of On March 15,Ben Jones negotiated a $25,000...

Question 6

Interest on a $5,000,15% promissory note for six months is:

Accepted Answer

A)  $375.
B)  $37.50.
C)  $3,750.
D)  $3.75.

Question 7

The maturity date for a three-month note dated March 31 is:

Accepted Answer

A)  July 1.
B)  June 30.
C)  May 31.
D)  June 29.

Question 8

On June 1,Mike's Motorcycle Shop accepted a 90-day,10%,$8,000 note from a customer from the sale of a motorcycle.On July 21,after 50 days,Mike discounted the note at First Bank at 8%.Record the journal entries for Mike's Motorcycles.

Accepted Answer

The answer of On June 1,Mike's Motorcycle Shop accepted a...

Question 9

A 3-month note dated September 30 is due December 31.

Accepted Answer

A) True 
 B)False

Question 10

David borrows $4,000 from Matthew and gives him a promissory note.David is the:

Accepted Answer

A)  payee.
B)  payor.
C)  maker.
D)  drawee.

Question 11

The proceeds from discounting a note receivable are the:

Accepted Answer

A)  principal + bank discount.
B)  maturity value - bank discount.
C)  principal - bank discount.
D)  maturity value minus principal.

Question 12

Martin Company needs additional time to pay its accounts payable to Boster Company.Martin makes a written promise to pay Boster the amount on a certain date.Martin records this transaction as follows:

Accepted Answer

A)  debit Notes Payable;credit Accounts Payable.
B)  debit Cash;credit Accounts Payable.
C)  debit Accounts Payable;credit Notes Payable.
D)  debit Notes Payable;credit Cash.

Question 13

Prepare general journal entries for the Knapp Computers Company for the following transactions:

Accepted Answer

The answer of Prepare general journal entries for the Knapp...

Question 14

Accrued interest on a note payable.
Debit ________ Credit ________

Accepted Answer

The answer of Accrued interest on a note payable.
Debit ________...

Question 15

The proper entry to make when a note is paid on the maturity date depends on whether the note is an interest-bearing or non-interest-bearing note.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  assets from Notes Receivable to Accounts Receivable.
B)  assets from Accounts Receivable to Notes Receivable.
C)  liabilities from Notes Payable to Accounts Payable.
D)  liabilities from Accounts Payable to Notes Payable.

Question 17

Paying the principal plus accrued interest.
Debit ________ & ________ Credit ________

Accepted Answer

The answer of Paying the principal plus accrued interest.
Debit ________...

Question 18

In calculating interest on a note,it is NOT necessary to take which of the following into consideration?

Accepted Answer

A)  The interest
B)  The principal
C)  The payee
D)  The length of the note

Question 19

The maturity value for a $7500,78-day note at 8% interest is $130.

Accepted Answer

A) True 
 B)False

Question 20

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).
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Store equipment } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Exam 14: Notes Receivable and Notes Payable

When an account receivable is exchanged for a note receivable,a shift in equity occurs.

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:

A $5,500,10% note dated May 20 for 78 days was discounted on June 23 at 12%.The number of days in the discount period is:

Betty's Boutique discounts its own 150-day,9%,$20,000 note payable at a bank.It records the proceeds as:

On March 15,Ben Jones negotiated a $25,000 bank loan for 270 days at an interest rate of 8%. Required (show your calculations): a)Determine the due date of the note. b)Calculate the amount of interest charged by the bank. c)Calculate the maturity value of the note.

Interest on a $5,000,15% promissory note for six months is:

The maturity date for a three-month note dated March 31 is:

On June 1,Mike's Motorcycle Shop accepted a 90-day,10%,$8,000 note from a customer from the sale of a motorcycle.On July 21,after 50 days,Mike discounted the note at First Bank at 8%.Record the journal entries for Mike's Motorcycles.

A 3-month note dated September 30 is due December 31.

David borrows $4,000 from Matthew and gives him a promissory note.David is the:

The proceeds from discounting a note receivable are the:

Martin Company needs additional time to pay its accounts payable to Boster Company.Martin makes a written promise to pay Boster the amount on a certain date.Martin records this transaction as follows:

Prepare general journal entries for the Knapp Computers Company for the following transactions:

Accrued interest on a note payable. Debit Credit

The proper entry to make when a note is paid on the maturity date depends on whether the note is an interest-bearing or non-interest-bearing note.

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

Paying the principal plus accrued interest. Debit & Credit

In calculating interest on a note,it is NOT necessary to take which of the following into consideration?

The maturity value for a $7500,78-day note at 8% interest is $130.

Exam 14: Notes Receivable and Notes Payable

When an account receivable is exchanged for a note receivable,a shift in equity occurs.

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:

A $5,500,10% note dated May 20 for 78 days was discounted on June 23 at 12%.The number of days in the discount period is:

Betty's Boutique discounts its own 150-day,9%,$20,000 note payable at a bank.It records the proceeds as:

On March 15,Ben Jones negotiated a $25,000 bank loan for 270 days at an interest rate of 8%. Required (show your calculations): a)Determine the due date of the note. b)Calculate the amount of interest charged by the bank. c)Calculate the maturity value of the note.

Interest on a $5,000,15% promissory note for six months is:

The maturity date for a three-month note dated March 31 is:

On June 1,Mike's Motorcycle Shop accepted a 90-day,10%,$8,000 note from a customer from the sale of a motorcycle.On July 21,after 50 days,Mike discounted the note at First Bank at 8%.Record the journal entries for Mike's Motorcycles.

A 3-month note dated September 30 is due December 31.

David borrows $4,000 from Matthew and gives him a promissory note.David is the:

The proceeds from discounting a note receivable are the:

Martin Company needs additional time to pay its accounts payable to Boster Company.Martin makes a written promise to pay Boster the amount on a certain date.Martin records this transaction as follows:

Prepare general journal entries for the Knapp Computers Company for the following transactions:

Accrued interest on a note payable. Debit ________ Credit ________

The proper entry to make when a note is paid on the maturity date depends on whether the note is an interest-bearing or non-interest-bearing note.

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

Paying the principal plus accrued interest. Debit ________ & ________ Credit ________

In calculating interest on a note,it is NOT necessary to take which of the following into consideration?

The maturity value for a $7500,78-day note at 8% interest is $130.

Accrued interest on a note payable. Debit Credit

Paying the principal plus accrued interest. Debit & Credit