20.Entries for Notes Receivable Spring Designs & Decorators issued a 120-day, 4%
ID: 2545019 • Letter: 2
Question
20.Entries for Notes Receivable Spring Designs & Decorators issued a 120-day, 4% note for $60,000, 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. August 11 b. Determine the maturity value of the note. $ Feedback Check My Work The due date is the date the note is to be paid. Remember the interest rate is stated on an annual basis, while the term is expressed as days. Assume a 360 day year. The maturity value is the amount that must be paid at the due date of the note. At the due date, the company records the receipt of payment on the note. c1. Journalize the entry to record the receipt of the note by Jaffe Furniture. Notes Receivable Accounts Receivable-Spring Designs Decorators Feedback Check My Work Partially correct 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. Cash Notes Receivable Interest Revenue
Explanation / Answer
a.due date = april 13 + 120 days => August 11th.
b.maturity value of the note = face value + (face value * interest * days of note / 360)
=> $60,000 + ($60,000*4% * 120 /360)
=>$60,000 + $800.
=>$60,800.
c1.
journal entry to record the receipt of note:
c2.to record receipt of cash on maturity.
APril 13 Notes receivable a/c ........Dr $60,000 .............To Accounts receivable - spring designs and decorators a/.c $60,000 (beng notes receivable accepted by Spring designs and decorators)Related Questions
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