Horngren's Accounting
11th Edition
ISBN: 9780133851151
Author: MILLER-NOBLES, Tracie L., Mattison, Brenda., Matsumura, Ella Mae, Horngren, Charles T.
Publisher: Pearson,
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Chapter 9, Problem S9.9SE
Computing interest amounts on notes receivable
A cable of notes receivable for 2016 follows:
| Principal | Interest Rate | Interest Period During 2016 | |
| Note 1 | $ 30,000 | 4% | 3 months |
| Note 2 | 8,000 | 5% | 180 days |
| Note 3 | 28,000 | 12% | 90 days |
| Note 4 | 110,000 | 10% | 6 months |
For each of the notes receivable, compute the amount of interest revenue earned during 2016. Round to the nearest dollar.
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A seven-month promissory note for $7,800 dated March 12, 2016 bears interest at 8%
a. What is the legal due date of the note?
b. What is the amount of interest payable at the due date?
c. What is the maturity value of the note?
Determine due date and interest on notes
Determine the due date and the amount of interest due at maturity on the following notes:
Date of note
A. January 10*
B . March 19
C. June 5
D. September 8
E. November 20
* February 2016 has 28 days
Face amount
A.$40,000
B. 18,000
C. 90,000
D. 36,000
E. $27,000
Interest rate
A. 5%
B. 8%
C. 7%
D. 3%
E. 4%
Term of note
A. 90 days
B. 180 days
C. 30 days
D. 90 days
E. 60 days
Assume 360 days in a year one commuting the interest.
Note Due date. Interest
(A) __________ $
(B) ___________ $
(C) ___________ $
(D) ____________ $
(E) ___________ $
Accounting for notes receivable and accruing interest
Carley Realty loaned money and received the following notes during 2018.
Note Date Principal Amount Interest rate term
April 1 $6000 7% 1 year
Sept 30 $12000 6% 6 month
Sept 19 $18000 8% 90 days
Requirements
Determine the maturity date and maturity value of each note.
Journalize the entries to establish each Note Receivable and to record collection of principal and interest at maturity. Include a single adjusting entry on December 31, 2018, the fiscal year-end, to record accrued interest revenue on any applicable note. Explanations are not required. Round to the nearest dollar.
Chapter 9 Solutions
Horngren's Accounting
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