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Exam 16: Notes Payable and Notes Receivable

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Question 31

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The Crown Company had the following transactions involving notes receivable during 2011. Record the transactions on page 7 of a general journal. Omit descriptions.

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Question 32

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A 30-day note dated October 15, would be due on November

A) 14.
B) 15.
C) 16.
D) 17. 16 days in October + 14 days into November.

E) B) and C)
F) A) and D)

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Question 33

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How much interest will accrue on a $40,000 face value, 60-day note that bears interest at 9 percent a year?

The face value of a noninterest-bearing note is its maturity value.

Compute the maturity value of a 5-month, 8 percent note with a face value of $8,000. (round answer to 2 decimal places)

Compute the maturity value of a 6-month, 9 percent note with a face value of $5,000.

If the amount of a note is not collected at maturity, the accountant should debit Uncollectible Accounts Expense and credit Notes Receivable.

A(n) ____________________ is a written order that requires the person or business addressed to pay a stated sum of money to another person or firm or to the bearer.

When a note receivable is discounted, the net proceeds are computed by subtracting the discount charges from the ____________________ value of the note.

Compute the maturity value of a 60-day, 7 percent note with a face value of $6,000.

How much interest will accrue on a $20,000 face value, 120-day note that bears interest at 9 percent a year?

When a note payable is __________________, the lender deducts interest on the loan in advance, and the borrower receives only the difference between the face amount of the note and the interest on it to maturity.

On March 1, a firm purchased equipment for $5,000, signing a 30-day note bearing interest at 12 percent a year. The entry to record the payment of the amount due on March 31 will include a debit to Notes Payable for

Compute the amount of interest owed on a 90-day, 10 percent note for $15,000.

If the proceeds of a discounted note are less than the face amount, the difference is debited to Interest Expense.

The total that must be paid when a note becomes due is known as the

Compute the maturity value of a 180-day, 6 percent note with a face value of $1,000.

The Jiminez Company accepted an interest-bearing note to settle a past-due account originating from a sale of merchandise. When the note is collected, the interest earned should be credited to

Interest Expense is usually classified as a(n) ____________________ expense on the income statement.

If the proceeds of a note discounted at a bank are greater than the face value of the note, the difference is recognized as