17. Sylvestor Systems borrows $88,000 cash on May 15, 2015, by signing a 30-day,

Question

17. Sylvestor Systems borrows $88,000 cash on May 15, 2015, by signing a 30-day, 7% note. 1. On what date does this note mature? June 13, 2015 June 14, 2015 June 15, 2015 June 16, 2015 June 17, 2015 2. Assume the face value of the note equals $88,000, the principal of the loan.

1) First, complete the table below to calculate the interest expense at maturity. Use those calculated values to prepare your journal entry to record payment of the note at maturity. (Use 360 days a year. Do not round intermediate calculations.)

2) Then record the payment of the note at maturity.

Interest at maturity Principle Rate (%) Time Total Interest

Explanation / Answer

1)Date of maturity = may 15 +30days = 14 june 2015

Note payable      debit              88000

Interest payable   debit                 513.33

Cash                   credit             88513.33

Principle 88000 Rate .07 TIme 30 Total Interest 88000*.07*30/360 = 513.33

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