Question

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.

Answer 1

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