Question

Note Receivable Cube Ice Company received a 120-day, 8% note for $96,000, dated April 9, from a customer on account. Assume 360 days in a year. 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. If an amount box does not require an entry, leave it blank.

Answer 1

Answer a. Due Date of Note = 7 August

Answer b. Maturity Value = $98560

Answer c. Journal on date of receipt of maturity value of note receivable

Date	Account	Debit	Credit
7-Aug	Cash	$98,560
	Note receivable		$96,000
	Interest Revenue		$2,560
	(Note receivable realized)

Detailed Workings

Calculation of Due date

	DAYS
April = 30-9	21
May	31
June	30
July	31
August	7 = 7th August Due Date
	120

Calculation of maturity value

Amount of interest on note	=96000 x 8% x 120/360
	=$2560
Maturity Value	=$96000+$2560
	=$98560

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