Question

Note Receivable

Quick Tire and Lube received a 120-day, 9% 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.
August 7

b. Determine the maturity value of the note.
$

Feedback

The due date is the date the note is to be paid.

Assume a 360 day year. The maturity value is the amount that must be paid at the due date of the note.

Learning Objective 6.

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.

Aug.	Cash
	Notes Receivable
	Interest Revenue

Answer 1

A) Due date = April 9 + 120 days = August 7

B) Maturity value = Face value + interest

= 96,000 * (96,000*9%*120/360)

= 98,880

Cash	98,880
Note receivable		96,000
Interest revenue		2880