**Entries for Notes Receivable****Scenario**: Spring Designs & Decorators issued a 120-day 6% note for $42,000 dated April 13 to Jaffe Furniture Company on account. Assume a 360-day year when calculating interest.---### Steps:1. **Determine the due date of the note**.2. **Determine the maturity value of the note**.3. **Journalize the entry to record the receipt of the note by Jaffe Furniture**.4. **Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank**.---**a. Determine the due date of the note**- The note is for 120 days dated April 13.- Calculate 120 days from April 13.(Include calculation method if needed, for educational purposes.)**b. Determine the maturity value of the note**- Principal (P) = $42,000- Interest Rate (R) = 6% annual- Time (T) = 120 days (convert to a fraction of a year by dividing by 360)Interest (I) = P × R × TMaturity Value = Principal + Interest---**Journal Entries:****c1. Journalize the entry to record the receipt of the note by Jaffe Furniture**\[\begin{array}{c}\text{Apr 13} & \quad & \quad & \quad & \quad & \text{Notes Receivable} & \$42,000 & \quad & \quad & \quad \\\quad & \quad & \quad & \quad & \quad & \text{Accounts Receivable} & \$42,000 & \quad & \quad & \quad \\\end{array}\]**c2. Journalize the entry to record the receipt of payment of the note at maturity**\[\begin{array}{c}\text{Aug 11} & \quad & \quad & \quad & \quad & \text{Cash} & \quad & Maturity\ Value & \quad & \quad \\\quad & \quad & \quad & \quad & \quad & \text{Notes Receivable} & \quad & \$42,000 & \quad & \quad \\\quad & \quad & \quad & \quad & \

Interest on note = Face value of note x rate of interest x no. of days / 360 = $42000 x 6% x 120/360…

Spring Designs & Decorators issued a 120-day, 6% note for $42,000, dated April 13 to Jaffe Furniture Company on account. Assume a 360-day year when calculating interest. a. Determine the due date of the note. b. Determine the maturity value of the note. c1. Journalize the entry to record the receipt of the note by Jaffe Furniture. c2. Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank.

Spring Designs & Decorators issued a 120-day, 6% note for $42,000, dated April 13 to Jaffe Furniture Company on account. Assume a 360-day year when calculating interest. a. Determine the due date of the note. b. Determine the maturity value of the note. c1. Journalize the entry to record the receipt of the note by Jaffe Furniture. c2. Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank.

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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