**Chapter 8: Receivables****Notes Receivable (Short Term)****Accounts:**- Notes Receivable- Interest Receivable- Interest Income (or Interest Revenue)**Terms:**- Maturity Value- Face Value- Issue DateA Promissory Note has a Face Amount, a Term, and an Interest Rate (expressed as an annual percentage). **Need to Calculate the Due Date of the Note****Example:**Assume that a 120-day note is signed on March 11. What is the maturity date of the note?- **Term of the Note:** 120- **Days that pass in March:** - Number of days in March: 31 - Date of the note in March: 11 - Number of days left: 20- **Number of Days in Other Months:** - Days that pass in April: 30 - Number of days left: 70 - Days that pass in May: 31 - Number of days left: 39 - Days that pass in June: 30 - Number of days left: 9 9 < 31; therefore, the due date is July 9.**Important Considerations:**Interest is not charged on the date the note is signed. Count the day after the date on the note to determine the due date.**Does it really matter whether you collect the note on July 9 or July 10?**Accepting payment on a note one day late without charging interest can set a precedent that may make it difficult to collect a note on time in the future.---**Accounting 1A Class Assignment****Chapter 8: Receivables**Determine the due date and the amount of interest due at maturity on the following notes dated in 2020:| Date of Note | Face Amount | Interest Rate | Term of Note ||--------------|-------------|---------------|--------------|| a. January 3* | $80,000 | 4% | 120 days || b. February 20*| $27,000 | 5 | 30 days || c. May 24 | $2,500 | 8 | 45 days || d. August 30 | $30,000 | 5 | 90 ### Educational Content on Notes and Receivables#### Notes TableThe table displayed is a list of promissory notes with the following columns:- **Date of Note**: When the note was issued.- **Face Amount**: The principal amount of the note.- **Interest Rate**: The annual interest rate applied.- **Term of Note**: The duration of the note in days.The table entries are:1. **January 3** - Face Amount: \$30,000 - Interest Rate: 6% - Term: 120 days2. **February 20** - Face Amount: \$21,000 - Interest Rate: 10% - Term: 30 days3. **May 24** - Face Amount: \$2,500 - Interest Rate: 8% - Term: 60 days4. **August 30** - Face Amount: \$30,000 - Interest Rate: 5% - Term: 90 days5. **October 4** - Face Amount: \$10,000 - Interest Rate: 9% - Term: 90 days*Note: February 2020 has 29 days. Assume 360 days in a year when computing interest.*#### Flush Mate Co. NotesFlush Mate Co. is involved with bathroom fixtures and has received notes with details as such:1. **Apr. 5** - Face Amount: \$50,000 - Term: 45 days - Interest Rate: 9%2. **May 15** - Face Amount: \$24,000 - Term: 60 days - Interest Rate: 8%3. **July 30** - Face Amount: \$42,000 - Term: 120 days - Interest Rate: 6%4. **Sept. 26** - Face Amount: \$54,000 - Term: 90 days - Interest Rate: 7%5. **Dec. 30** - Face Amount: \$72,000 - Term: 30 days - Interest Rate: 10%Tasks:1. Determine for each note: - (a) Due date - (b) Interest amount at maturity, and identify each by

Interest Expense = Face Amount x Interest Rate x n360 days Total Amount due = Interest at Maturity +…

Determine the due date and the amount of interest due at maturity on the following notes dated in 2020: Date of Note a. January 3* b. February 20 c. May 24 d. August 30 e. October 4 Face Amount $80,000 27,000 62,500 30,000 40,000 Interest Rate Term of Note 120 days 30 days 45 days 90 days 90 days 69 4 S - February 2020 has 29 days. Assume 360 days in a year when computing the interest

Determine the due date and the amount of interest due at maturity on the following notes dated in 2020: Date of Note a. January 3* b. February 20 c. May 24 d. August 30 e. October 4 Face Amount $80,000 27,000 62,500 30,000 40,000 Interest Rate Term of Note 120 days 30 days 45 days 90 days 90 days 69 4 S - February 2020 has 29 days. Assume 360 days in a year when computing the interest

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 12MC: Which of the following accounts are used when a short-term note payable with 5% interest is honored...

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A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
Part A: Calculate the interest on the following notes: Part B: Determine the maturity dates on the following notes: Check Figure 1. Interest, 66.92
A company collects an honored note with a maturity date of 24 months from establishment, a 10%interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of thehonored note at maturity date?A. Interest Revenue, Interest Expense, CashB. Interest Receivable, Cash, Notes ReceivableC. Interest Revenue, Interest Receivable, Cash, Notes ReceivableD. Notes Receivable, Interest Revenue, Cash, Interest Expense
Subject:-- general accounting
20 D8 E10-5 exercise FAB Company sells a wide range of merchandise, which are initially purchased on account. Short-term notes are frequently issued to obtain cash. a) On January 10, FAB purchased $200 of merchandise on credit on a perpetual system. b) On March 1, FAB borrowed $600 by issuing a promissory note at face with 8 percent interest accrued at the beginning of each month until paid at maturity in six months. c) On April 1, FAB accrued interest on the $600 note. NAME d) On September 1, FAB paid the note and accrued interest. REQUIRED: 1. On the spreadsheet below, record each event (a) to (d) above; name blank accounts. 2. As each event is recorded, indicate its effect on FAB's current ratio, debt-asset ratio, and times interest earned: Increase, Decrease, or No effect. FAB had $3000 liabilities and $5000 total assets prior to January 10. Event--FAB Co. Beginning Balanc a)buy merchandise b) receive on note c) accrue interest for March on Apr 1 d) pay note pay interest Ending…
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