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(a)
Note receivable:
Note receivable refers to a written promise received by the creditor from the debtor in formal, for the amounts to be settled within a stipulated period of time. This written promise is issued by a debtor or borrower to the lender or creditor. Notes receivable is an asset of a business. Notes receivable often used for the credit periods of more than 60 days.
Due date:
Due date is the maturity date on note, on due date the borrower is supposed to repay the face value of the note along with interest.
Interest on note:
Interest on note is the amount charged on the principal value of note for the privilege of borrowing money. Interest is to be paid by the borrower and to be received by the lender.
The due date for the note issued on May 14, 2016.
(b)
The maturity value of the note.
(c) 1
To journalize: The entries to record the transactions of M Furniture Company.
(2)
To journalize: The entries to record the receipt of the payment of the note at maturity.
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Chapter 8 Solutions
Financial & Managerial Accounting
- 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 Expensearrow_forwardArvan Patel is a customer of Banks Hardware Store. For Mr. Patels latest purchase on January 1, 2018, Banks Hardware issues a note with a principal amount of $480,000, 13% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Banks Hardware Store for the following transactions. A. Note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019.arrow_forwardNotes Receivable On September 1, 2016, Dougherty Corp. accepted a six-month, 7%, $45,000 interest-bearing note from Rozelle Company in payment of an account receivable. Doughertys year-end is December 31. Rozelle paid the note and interest on the due date. Required Who is the maker and who is the payee of the note? What is the maturity date of the note? Prepare all necessary journal entries that Dougherty needs to make in connection with this note.arrow_forward
- On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.arrow_forwardAnderson Air is a customer of Handler Cleaning Operations. For Anderson Airs latest purchase on January 1, 2018, Handler Cleaning Operations issues a note with a principal amount of $1,255,000, 6% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Handler Cleaning Operations for the following transactions. A. Entry for note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019arrow_forwardResin Milling issued a $390,500 note on January 1, 2018 to a customer in exchange for merchandise. The merchandise had a cost to Resin Milling of $170,000. The terms of the note are 24-month maturity date on December 31, 2019 at a 5% annual interest rate. The customer does not pay on its account and dishonors the note. Record the journal entries for Resin Milling for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on January 1, 2020, assuming interest has not been recognized before note maturityarrow_forward
- Need help for questions B & Carrow_forwardK McKean Company has a three-month, $16,000, 6% note receivable from L. Stow that was signed on June 1, 2016. Stow defaults on the loan on September 1. Journalize the entry for McKean to record the default of the loan. (Record debits first, then, credits. Select the explanation on the last line of the journal entry table.) Date 2016 Sept. 1 Accounts Debit Credit HOarrow_forwardOn September 1, 2018, Packaging Company. Borrowed OR 1,200,000 cash from Bank Muscat. The company issued a seven month, 10% promissory note. Interest was payable at maturity. The packaging financial period is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by the Packaging Company. 2. Prepare the appropriate adjusting entry for the note to record on December 31, 2018, by Packaging. 3. Prepare the journal entry for the payment of the note at maturity.arrow_forward
- Entries for notes receivable Spring designs and decorators issued a 120- day, 8% note for 78,000, dated April 13th 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 level of the note. $ _______ C1. Journalizing 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. __________ __________ __________arrow_forwardDetermine the maturity date and interest for a notes receivableAmplify Bank establishes a $45,300, 7-month, 6% note dated October 31, 2021 with Q Tile LLC. All of the note's interest is due at its maturity date. After reviewing the information, determine the maturity date of the note and calculate the amount of interest that is due at the maturity date. 1. What is the maturity date of the note (include the month, day and year)? 2. What is the amount of interest that is due at the maturity date (round answer to two decimal places)? 2(a). Show the work for your interest calculationarrow_forwardNote receivable Prefix Supply Company received a 120-day, 6% note for $500,000, dated April 12 from a customer on account. Assume 360-days in a year. a. Determine the due date of the note. b. Determine the maturity value of the note. 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. 88arrow_forward
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