Calculating InterestUsing 360 days as the denominator, calculate interest for the following notes using theformula I = P x Rx T. Round your answers to the nearest cent.Principal RateTimeInterest$4,1006.00%30 days1,0007.50603,5008.001209506.80951,2507.251022,6007.0090W3 B Journal Entries (Note Received, Renewed, and Collected)Jan.Received a 30-day, 6% note in payment for merchandise sale of $20,000.16Feb. Received $100 (interest) on the old (January 16) note; the old note is renewed for 3015 days at 7%.Mar.Received principal and interest on the new (February 15) note.1719 Received a 60-day, 6% note in payment for accounts receivable balance of $8,000.May Received $80 (interest) plus $1,000 principal on the old (March 19) note; the old note18renewed for 60 days (from May 18) at 6%.JulyReceived principal and interest on the new (May 18) note.17Prepare general journal entries for the transactions. Assume 360 days in a year.Page: 1DOC. POST.DATEACCOUNT TITLEDEBIT CREDITNO. REF.20--1Jan. 163.4Feb. 156.788.Mar. 179.10101111121213 Mar. 19131414151516 May 1816171718181919202021 July 17212222232324241II III IIIII III II IIII

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Calculating Interest Using 360 days as the denominator, calculate interest for the following notes using the formula I = P x R x T. Round your answers to the nearest cent. Principal Rate Time Interest $4,100 6.00% 30 days 1,000 7.50 60 3,500 8.00 120 950 6.80 95 1,250 7.25 102 2,600 7.00 90

Calculating Interest Using 360 days as the denominator, calculate interest for the following notes using the formula I = P x R x T. Round your answers to the nearest cent. Principal Rate Time Interest $4,100 6.00% 30 days 1,000 7.50 60 3,500 8.00 120 950 6.80 95 1,250 7.25 102 2,600 7.00 90

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 2SEA

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Calculating Interest
Using 360 days as the denominator, calculate interest for the following notes using the
formula I = P x Rx T. Round your answers to the nearest cent.
Principal Rate
Time
Interest
$4,100
6.00%
30 days
1,000
7.50
60
3,500
8.00
120
950
6.80
95
1,250
7.25
102
2,600
7.00
90
W3 B

Journal Entries (Note Received, Renewed, and Collected)
Jan.
Received a 30-day, 6% note in payment for merchandise sale of $20,000.
16
Feb. Received $100 (interest) on the old (January 16) note; the old note is renewed for 30
15 days at 7%.
Mar.
Received principal and interest on the new (February 15) note.
17
19 Received a 60-day, 6% note in payment for accounts receivable balance of $8,000.
May Received $80 (interest) plus $1,000 principal on the old (March 19) note; the old note
18
renewed for 60 days (from May 18) at 6%.
July
Received principal and interest on the new (May 18) note.
17
Prepare general journal entries for the transactions. Assume 360 days in a year.
Page: 1
DOC. POST.
DATE
ACCOUNT TITLE
DEBIT CREDIT
NO. REF.
20--
1
Jan. 16
3.
4
Feb. 15
6.
7
8
8.
Mar. 17
9.
10
10
11
11
12
12
13 Mar. 19
13
14
14
15
15
16 May 18
16
17
17
18
18
19
19
20
20
21 July 17
21
22
22
23
23
24
24
1II III II
III III II IIII

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Journal Entries (Note Received, Renewed, and Collected) Jan. Received a 30-day, 6% note in payment for merchandise sale of $20,000. 16 Feb. Received $100 (interest) on the old (January 16) note; the old note is renewed for 30 15 days at 7%. Mar. Received principal and interest on the new (February 15) note. 17 19 Received a 60-day, 6% note in payment for accounts receivable balance of $8,000. May Received $80 (interest) plus $1,000 principal on the old (March 19) note; the old note 18 renewed for 60 days (from May 18) at 6%. July Received principal and interest on the new (May 18) note. 17 Prepare general journal entries for the transactions. Assume 360 days in a year. Page: 1 ACCOUNT TITLE DOC. POST. NO. REF. DATE DEBIT CREDIT 20-- 1 Jan. 16 3 4 Feb. 15 4 6 7 8 9 Mar. 17 9 10 10 11 11 12 12 13 Mar. 19 13 14 14 15 15 16 May 18 16 17 17 18 18 19 19 20 20 21 July 17 21 22 22 23 23 24 24 in
Calculating Interest Using 360 days as the denominator, calculate interest for the following notes using the formula I = P x R × T. Round your answers to the nearest cent. Principal Rate Time Interest $4,100 6.00% 30 days 1,000 7.50 60 3,500 8.00 120 950 6.80 95 1,250 7.25 102 2,600 7.00 90
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Given an interest rate of 4.0% compounded monthly, determine the effective rate of interest. Answer as a percentage rounded to two decimal places. reff = Check %
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