Question

Note Receivable

Same Day Surgery Center received a 120-day, 9% note for $24,000, dated April 9, from a customer on account. Assume 360 days in a year.

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 maturity. If an amount box does not require an entry, leave it blank.

Answer 1

a.

Month	Days
April	21
May	31
June	30
July	31
August	7
Total	120 days

The due date of the note. = 7 August

b.

Interest receivable on note at maturity = Par value of note x Interest rate x 120/360

= 24,000 x 9% x 120/360

= $720

Maturity value of note = Par value of note + Interest on note

= 24,000+720

= $24,720

c.

Genera Journal	Debit	Credit
Cash	$24,720
Interest revenue		$720
Note receivable		$24,000

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