Question

Guzman Company received a 60-day, 4% note for $46,000 dated July 12 from a customer on account.

	Required:
	a. Determine the due date of the note.
	b. Determine the maturity value The amount that is due at the maturity or due date of a note. of the note.
	c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.

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Chart of Accounts

CHART OF ACCOUNTS
Guzman Company
General Ledger
ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 129 Allowance for Doubtful Accounts 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense

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Starting Questions

a. Determine the due date of the note.

selector 1

• May 13
• September 12
• September 10
• October 12
• August 30
• May 12

Points:

b. Determine the maturity value

The amount that is due at the maturity or due date of a note.

of the note. (Note: Round computations to the nearest whole dollar.)

Points:

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Explanation

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Journal

c. Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3

Answer 1

a.
Due date of the note is

July 12 + 60 days

= July 12 + 19 days + 31 days + 10 days of September = September 10

b.
The maturity value will be Principal value + Interest

= 46,000 + (46,000 X 4% X 60 / 365) = 46,000 + 302.47 = $ 46,302.47

c.

			DEBIT	CREDIT
Sep 10	110	Cash	$ 46,302.47
	132	Notes Receivable		$ 46,000.00
	610	Interest Revenue		$        302.47