Valley Designs issued a 120-day, 6% note for $80,000 dated April 20 to Bork Furniture Company on account.

Question

Question

Valley Designs issued a 120-day, 6% note for $80,000 dated April 20 to Bork Furniture Company on account.

Required:

A. Determine the due date of the note.

B. Determine the maturity value of the note. Assume a 360-day year.

C. Journalize the entries to record the following: (1) receipt of the note by Bork Furniture and (2) receipt of payment of the note at maturity. Refer

to the Chart of Accounts for exact wording of account titles.

business accounting

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Answer 1

✔ Recommended Answer

Answer #1

A
Due date = August 18	(10+31+30+31+18)

B
Maturity value	81600	=80000+(800006%120/360)

C
Date	Description	Debit	Credit	Assets	Liabilities	Equity
April 20	Notes Receivable	80000		↑
	Accounts Receivable-Valley Designs		80000	↓

August 18	Cash	81600		↑
	Notes Receivable		80000	↓
	Interest Revenue		1600			↑

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Answer 2

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Valley Designs issued a 120-day, 6% note for $80,000 dated April 20 to Bork Furniture Company on account.

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Valley Designs issued a 120-day, 6% note for $80,000 dated April 20 to Bork Furniture Company on account.

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Valley Designs issued a 120-day, 6% note for $80,000 dated April 20 to Bork Furniture Company on account.