HomeworkLib
Question

A three year note receivable may show up in what two (2) places on this years...

A three year note receivable may show up in what two (2) places on this years Balance Sheet and why? Explain in a paragraph or two.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Solution: A note receivable is an account of financial transaction to be made by a maker to the payee within the agreed period of time, also known as promissory note.

Here, a three year note receivable states payment of the principal amount along with interest amount(at agreed interest rate) in three year as maturity time. To the person receiving such note(payee), it is an asset and such interest as revenue income. To the person making such note of payment(maker), it stands as liability and revenue expense.

Three year note receivable is recorded under payee's balance sheet under current asset head at face value, as it will be converted into cash in near future period. The remaining calculate amount of such note which will be received beyond accounting period will be recorded under non-current head in investment section.

0 0
Add a comment
Know the answer?
Add Answer to:
A three year note receivable may show up in what two (2) places on this years...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Sweet Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...

    Sweet Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $1,200,000 Note receivable from officer 491,300 Transactions during 2020 and other information relating to Sweet’s long-term receivables were as follows. 1. The $1,200,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Sweet’s electronics division to New York Company. Principal payments of $400,000 plus appropriate interest are...

  • Cougar Plastics Company has been operating for three years. At December 31 of last year, the...

    Cougar Plastics Company has been operating for three years. At December 31 of last year, the accounting records reflected the following: Cash $ 20,000 Accounts payable $ 19,000 Investments (short-term) 3,500 Accrued liabilities payable 2,000 Accounts receivable 4,400 Notes payable (short-term) 5,200 Inventory 30,000 Notes payable (long-term) 49,000 Notes receivable (long-term) 1,400 Common stock 9,300 Equipment 43,000 Additional paid-in capital 83,700 Factory building 101,000 Retained earnings 38,600 Intangibles 3,500 Summarized activities during the year: Purchased short-term investments for $7,800 cash....

  • Carla Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...

    Carla Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $2,400,000 Note receivable from officer 495,100 Transactions during 2020 and other information relating to Carla's long-term receivables were as follows. 1. The $2,400,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Carla's electronics division to New York Company. Principal payments of $800,000 plus appropriate interest are...

  • Cambria Limited took a $360,000 two-year note receivable from a customer in connection with a major...

    Cambria Limited took a $360,000 two-year note receivable from a customer in connection with a major inventory sale transaction on 1 January 20X5. The note required annual end-of-year interest payments of 4%, and the principal was due at the end of 20X6. Assume now that the market interest rate is 8%. Calculate the present value of the note, and prepare a schedule that shows the annual interest. (Round time value factor to 5 decimal places and final answers to the...

  • Indigo Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...

    Indigo Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $1,800,000 Note receivable from officer 439,100 We were unable to transcribe this imagePrepare the long-term receivables section of Indigo's balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 5,125.) INDIGO INC. Long-Term Receivables Section of Balance Sheet Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Indigo's...

  • 7.61/ At the beginning of 2013, Gannon Company received a three-year zero-interest-bearing $1,000...

    7.61/ At the beginning of 2013, Gannon Company received a three-year zero-interest-bearing $1,000 trade note. The market rate for equivalent notes was 8% at that time. Gannon reported this note as a $1,000 trade note receivable on its 2013 year-end statement of financial position and $1,000 as sales revenue for 2013. What effect did this accounting for the note have on Gannon's net earnings for 2013, 2014, 2015, and its retained earnings at the end of 2015, respectively? And explain...

  • Henderson Corporation’s trial balance for July 31, the end of its fiscal year, included the following...

    Henderson Corporation’s trial balance for July 31, the end of its fiscal year, included the following accounts Accounts Receivable $21,000 Inventories   57,000 Copyright   18,000 Investments 41,000 Prepaid Insurance     6,000 Note receivable, due in two years 74,000 Cash in Bank   4,500 Investments are Treasury Bills that were purchased in May and mature on August 15. Prepaid Insurance is a three-year policy that was purchased on July 31. The amount that should be classified as current assets in the July 31...

  • Problem 7-9 Sheffield Inc. had the following long-term receivable account balances at December 31, 2016. Note...

    Problem 7-9 Sheffield Inc. had the following long-term receivable account balances at December 31, 2016. Note receivable from sale of division $1,800,000 Note receivable from officer 421,000 Transactions during 2017 and other information relating to Sheffield's long-term receivables were as follows The $1,800,000 note receivable Company. Principal payments of $600,000 plus appropriate interest are due on May 1, 2017, 2018, and 2019. The first principal and interest payment was made on May 1, 2017. Collection of the note installments is...

  • Suppose that the current yield on a two year Treasury note is 1.20 percent and the...

    Suppose that the current yield on a two year Treasury note is 1.20 percent and the yield on a three year note is 1.44 percent. What is the implicit one year forward rate for two years ahead? Why is it higher than 1.44 percent? Would you please perform this calculation on excel?  

  • Sheffield Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...

    Sheffield Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $2,400,000 Note receivable from officer 495,100 Transactions during 2020 and other information relating to Sheffield’s long-term receivables were as follows. 1. The $2,400,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Sheffield’s electronics division to New York Company. Principal payments of $800,000 plus appropriate interest are...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT