**Note Receivable Exercise Explanation**Hasty and Tasty Foodservice has received a 120-day, 7% note for $84,000, dated June 12. The note is from a customer on account. Assume there are 360 days in a year for the purpose of interest calculation. **a. Determine the Due Date of the Note**- The due date is calculated as 120 days from June 12, which is October 10.**b. Determine the Maturity Value of the Note**- The maturity value is the total amount to be paid back at the end of the note term. To calculate this, you need to determine the interest and add it to the principal amount of the note. \[ \text{Interest} = \text{Principal} \times \text{Rate} \times \frac{\text{Time}}{360} \] \[ \text{Interest} = 84,000 \times 0.07 \times \frac{120}{360} = 1,960 \] \[ \text{Maturity Value} = \text{Principal} + \text{Interest} = 84,000 + 1,960 = 85,960 \]**c. Journalize the Entry to Record the Receipt of the Payment of the Note at Maturity**For journalizing the entry at maturity, you'll record:- **Cash:** - Debit for $85,960 to reflect the receipt of cash.- **Notes Receivable:** - Credit for $84,000 to remove the note receivable from the accounts.- **Interest Revenue:** - Credit for $1,960 to recognize the earned interest.Note: If an amount box does not require an entry, leave it blank.

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Description: **Note Receivable Exercise Explanation**Hasty and Tasty Foodservice has received a 120-day, 7% note for $84,000, dated June 12. The note is from a customer on account. Assume there are 360 days in a year for the purpose of interest calculation. **a.

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Hasty and Tasty Foodservice received a 120-day, 7% note for $84,000, dated June 12, from a customer on account. Assume 360 days in a year. a. Determine the due date of the note. October 10 b. Determine the maturity value of the note. Feedback C. Journalize the entry to record the receipt'of the payment of the note at maturity. If an amount box does not require an entry, leave it blank. Cash v Notes Receivable v Interest Revenue v 000 000

Hasty and Tasty Foodservice received a 120-day, 7% note for $84,000, dated June 12, from a customer on account. Assume 360 days in a year. a. Determine the due date of the note. October 10 b. Determine the maturity value of the note. Feedback C. Journalize the entry to record the receipt'of the payment of the note at maturity. If an amount box does not require an entry, leave it blank. Cash v Notes Receivable v Interest Revenue v 000 000

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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