Question

Entries for Notes Receivable Valley Designs issued a 90-day, 6% note for $54,000, dated April 15, to Bork Furniture Company on account. Assume 360 days in a year when computing the interest

. a. Determine the due date of the note.

July 14

b. Determine the maturity value of the note. $--------

c1. Journalize the entry to record the receipt of the note by Bork Furniture.

Notes Receivable__________

Accounts Receivable-Valley Design_______

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______

Answer 1

Answer- a)- The due date of the note = July 14.

b)- The maturity value of the note = $54000+($54000*6%*90 days)/360 days

= $54000+$810

= $54810

c1)- The entry to record the receipt of the note by Bork Furniture =

S.NO.	ACCOUNTS TITLES & EXPLANATION	DEBIT	CREDIT
		$	$
1	Notes Receivable	54000
	Accounts Receivable-Valley Design		54000
	(Being entry recorded)

c2)- The entry to record the receipt of payment of the note at maturity=

S.NO.	ACCOUNTS TITLES & EXPLANATION	DEBIT	CREDIT
		$	$
1	Cash	54810
	Notes Receivable		54000
	Interest revenue		810
	(Being entry recorded)