Gen-X Ads Co. produces advertising videos. During the current fiscal year, Gen-X Ads Co. received the following notes: Date Face Amount Interest Rate Term 1. Apr. 10 $93,000 4% 60 days 2. June 24 16,800 6 30 days 3. July 1 63,000 6 120 days 4. Oct. 31 63,000 9 60 days 5. Nov. 15 72,000 6 60 days 6. Dec. 27 144,000 4 30 days Required: Question Content Area Assume 360 days in a year. 1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Note (a) Due Date (b) Interest Due at Maturity (1) $fill in the blank ff487bf42fbb015_2 (2) fill in the blank ff487bf42fbb015_4 (3) fill in the blank ff487bf42fbb015_6 (4) fill in the blank ff487bf42fbb015_8 (5) fill in the blank ff487bf42fbb015_10 (6) fill in the blank ff487bf42fbb015_12 Question Content Area 2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank. Accounts Receivable Accounts Receivable Notes Receivable Notes Receivable Interest Revenue Interest Revenue Feedback Area Feedback Count the number of days in each month until the total number of days is reached for the term of the note and this will be the due date. Interest is not charged on the first day of the note. Typically, the maker of a dishonored note fails to pay the note on the due date. A company that holds a dishonored note transfers the face amount of the note plus any interest due back to an accounts receivable account. Interest revenue is not dependent on receiving the interest at this point. Cash received will include the maturity value of the note. Question Content Area 3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Interest Receivable Interest Receivable Interest Revenue Interest Revenue Question Content Area 4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. If an amount box does not require an entry, leave it blank. Cash Cash Interest Expense Interest Expense Interest Receivable Interest Receivable Notes Payable Notes Payable Cash Cash Interest Expense Interest Expense Interest Payable Interest Payable Notes Payable Notes Payable

Gen-X Ads Co. produces advertising videos. During the current fiscal year, Gen-X Ads Co. received the following notes: Date Face Amount Interest Rate Term 1. Apr. 10 $93,000 4% 60 days 2. June 24 16,800 6 30 days 3. July 1 63,000 6 120 days 4. Oct. 31 63,000 9 60 days 5. Nov. 15 72,000 6 60 days 6. Dec. 27 144,000 4 30 days Required: Question Content Area Assume 360 days in a year. 1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Note (a) Due Date (b) Interest Due at Maturity (1) $fill in the blank ff487bf42fbb015_2 (2) fill in the blank ff487bf42fbb015_4 (3) fill in the blank ff487bf42fbb015_6 (4) fill in the blank ff487bf42fbb015_8 (5) fill in the blank ff487bf42fbb015_10 (6) fill in the blank ff487bf42fbb015_12 Question Content Area 2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank. Accounts Receivable Accounts Receivable Notes Receivable Notes Receivable Interest Revenue Interest Revenue Feedback Area Feedback Count the number of days in each month until the total number of days is reached for the term of the note and this will be the due date. Interest is not charged on the first day of the note. Typically, the maker of a dishonored note fails to pay the note on the due date. A company that holds a dishonored note transfers the face amount of the note plus any interest due back to an accounts receivable account. Interest revenue is not dependent on receiving the interest at this point. Cash received will include the maturity value of the note. Question Content Area 3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Interest Receivable Interest Receivable Interest Revenue Interest Revenue Question Content Area 4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. If an amount box does not require an entry, leave it blank. Cash Cash Interest Expense Interest Expense Interest Receivable Interest Receivable Notes Payable Notes Payable Cash Cash Interest Expense Interest Expense Interest Payable Interest Payable Notes Payable Notes Payable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question Content Area

Assume 360 days in a year.

1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number.

Note	(a) Due Date	(b) Interest Due at Maturity
(1)		$fill in the blank ff487bf42fbb015_2
(2)		fill in the blank ff487bf42fbb015_4
(3)		fill in the blank ff487bf42fbb015_6
(4)		fill in the blank ff487bf42fbb015_8
(5)		fill in the blank ff487bf42fbb015_10
(6)		fill in the blank ff487bf42fbb015_12

Question Content Area

2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank.

		Accounts Receivable	Accounts Receivable
		Notes Receivable	Notes Receivable
		Interest Revenue	Interest Revenue

Feedback Area

Feedback

Count the number of days in each month until the total number of days is reached for the term of the note and this will be the due date. Interest is not charged on the first day of the note.

Typically, the maker of a dishonored note fails to pay the note on the due date. A company that holds a dishonored note transfers the face amount of the note plus any interest due back to an accounts receivable account. Interest revenue is not dependent on receiving the interest at this point.

Cash received will include the maturity value of the note.

Question Content Area

3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. If an amount box does not require an entry, leave it blank.

Dec. 31		Interest Receivable	Interest Receivable
		Interest Revenue	Interest Revenue

Question Content Area

4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. If an amount box does not require an entry, leave it blank.

		Cash	Cash
		Interest Expense	Interest Expense
		Interest Receivable	Interest Receivable
		Notes Payable	Notes Payable
		Cash	Cash
		Interest Expense	Interest Expense
		Interest Payable	Interest Payable
		Notes Payable	Notes Payable

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	Date	Face Amount	Interest Rate	Term
1.	Apr. 10	$93,000		4%	60	days
2.	June 24	16,800		6	30	days
3.	July 1	63,000		6	120	days
4.	Oct. 31	63,000		9	60	days
5.	Nov. 15	72,000		6	60	days
6.	Dec. 27	144,000		4	30	days