Question

Exercise 9-3 Accounting for note payable LO P1 Sylvestor Systems borrows $163,000 cash on May 15, 2017, by signing a 60-day, 4% note. 1. On what date does this note mature? July 13, 2017 July 14, 2017 July 15, 2017 July 16, 2017 July 17, 2017

Answer 1

Answer :-

1)In the question it was given that Sylvestor Systems borrows $163,000 cash on May 15, 2017, by signing a 60-day, 4% note.

Mature date of Note = May 15, 2017 + 60 days

Mature date of Note = July 14,2017

2) a) Journal entry to record issuance of the note are as follows :-

Date	Particular	Debit	Credit
May 15,2017	Cash A/c Dr.	$163,000
	To Note payable A/c		$163,000
	(To record insurance of note)

2)b)Table to calculate the interest expense at maturity are as follows :

	Interest at maturity
Principal	$163,000
Rate (%)	4%
Time	60/360
Total Interest = $163,000 × 4% × 60/360	$1,087

Journal entry to record payment of the note at maturity are as follows :-

Date	Particular	Debit	Credit
July 14,2017	Interest expense A/c Dr.	$1,087
	Note Payable A/c Dr.	$163,000
	To Cash A/c		$164,087
	(To record payment of the note at maturity)