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 $75,000 4% 60 days 2. June 24 13,200 6 30 days 3. July 1 36,000 6 120 days 4. Oct. 31 36,000 9 60 days 5. Nov. 15 72,000 6 60 days 6. Dec. 27 126,000 4 30 days Required: 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) (2) (3) (4) (5) (6) 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 or enter "0". Cash Cash Notes Receivable Notes Receivable Interest Receivable Interest Receivable 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. 3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Dec. 31 Notes Receivable Interest Receivable 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 or enter "0".
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 | $75,000 | 4% | 60 | days | ||
| 2. | June 24 | 13,200 | 6 | 30 | days | ||
| 3. | July 1 | 36,000 | 6 | 120 | days | ||
| 4. | Oct. 31 | 36,000 | 9 | 60 | days | ||
| 5. | Nov. 15 | 72,000 | 6 | 60 | days | ||
| 6. | Dec. 27 | 126,000 | 4 | 30 | days |
Required:
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 |
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| (1) |
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| (2) |
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| (3) |
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| (4) |
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| (5) |
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| (6) |
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2.
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Cash | Cash |
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Notes Receivable | Notes Receivable | |
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Interest Receivable | Interest Receivable |
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
Cash received will include the maturity value of the note.
3. Journalize the
| Dec. 31 |
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Notes Receivable | |
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Interest Receivable |
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 or enter "0".
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