7. BlueBlueberry Unlimited received a 180-day, 6% note for $50,000, dated Octobe
ID: 2380036 • Letter: 7
Question
7. BlueBlueberry Unlimited received a 180-day, 6% note for $50,000, dated October 15 from a customer on account.
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 the maturity date.
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 the maturity date.
Explanation / Answer
a.
Determine the due date of the note.
180-day, 6% note for $50,000, dated October 15
Oct 16 to 31 = 16 days
Nov 1 to 30 = 30 days
Dec 1 to 31 = 31 days
Jan 1 to 31 = 31 days
Feb1 to 28 = 28 days
March 1 to 31 = 31 days
April 1 to 13 = 13 days
Total 180 days, so maturity date is April 13
b.
Determine the maturity value of the note.
Maturity value = 50000 + 50000*6%*180/360 = 50000 + 1500 = $51500
c.
Journalize the entry to record the receipt of the payment of the note at the maturity date.
Debit Cash $51500
credit 'Notes Receivable' $50,000
Credit Interest income $1500
a.
Determine the due date of the note.
180-day, 6% note for $50,000, dated October 15
Oct 16 to 31 = 16 days
Nov 1 to 30 = 30 days
Dec 1 to 31 = 31 days
Jan 1 to 31 = 31 days
Feb1 to 28 = 28 days
March 1 to 31 = 31 days
April 1 to 13 = 13 days
Total 180 days, so maturity date is April 13
b.
Determine the maturity value of the note.
Maturity value = 50000 + 50000*6%*180/360 = 50000 + 1500 = $51500
c.
Journalize the entry to record the receipt of the payment of the note at the maturity date.
Debit Cash $51500
credit 'Notes Receivable' $50,000
Credit Interest income $1500
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