Blackwell Industries received a 120-day, 9% note for $180,000, dated August 10 from a customer on account.

Question

Question

Required

(a) Determine the due date of the note.

(b) Determine the maturity value of the note.

(c) Journalize the entry to record the receipt of the payment of the note at maturity.

business accounting

Answer 1

Answer #1

a) Due date of note = Aug 10 + 120 days = December 8th

So, Due date of note = December 8th

b) Maturity value of note = $180,000 + ($180,000 * 9% * 120/365)

Maturity value of note = $180,000 + $5,326.03

Maturity value of note = $185,326.03

c) Cash account.........................debit $185,326.03

To interest revenue account.........credit $5,326.03

To Note receivable account...........credit $180,000

Answer 2

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