Entries for Notes Receivable
Valley Designs issued a 90-day, 6 note for $36,000, dated April 19, to Bark Furniture Company on account. Assume 360 days in a year when computing the interest.
a. Determine the due date of the note
b. Determine the maturity value of the note.
c1. Journalize the entry to record the receipt of the note by Bork Furniture. If an amount box does not require an entry, leave it blank.
c2. Souralire the entry to record the receipt of payment of the note at maturity. I an amount ber does not require an entry, leave t bank.
SOLUTION : (A) | ||||
Due Date of the note = July 18 | ||||
SOLUTION : (B) | ||||
Par Value of the Note = | $36,000 | |||
Interest @ 6% for 90 Days = $ 36,000 X 6% X 90/360 = | $540 | |||
Maturity Value | $36,540 | |||
SOLUTION : (C1) | ||||
Journal Entries | ||||
Transaction | ACCT Title and explanation | Debit | Credit | |
1 | Notes Receivable | $36,000 | ||
Account Receivable - Valley Designs | $36,000 | |||
SOLUTION : (C2) | ||||
Journal Entries | ||||
Transaction | ACCT Title and explanation | Debit | Credit | |
1 | Cash | $36,540 | ||
Notes Receivable | $36,000 | |||
Interest Revenue | $540 | |||
Valley Designs issued a 90-day, 6 note for $36,000, dated April 19, to Bark Furniture Company on account.
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