Exam 16: Notes Payable and Notes Receivable

Compute the maturity value of a 5-month, 8 percent note with a face value of $8,000. (round answer to 2 decimal places)

When a note payable is __________________, the lender deducts interest on the loan in advance, and the borrower receives only the difference between the face amount of the note and the interest on it to maturity.

If the proceeds of a note discounted at a bank are greater than the face value of the note, the difference is recognized as

Compute the maturity value of a 180-day, 6 percent note with a face value of $1,000.

A(n) ____________________ is a written order that requires the person or business addressed to pay a stated sum of money to another person or firm or to the bearer.

On March 1, a firm purchased equipment for $5,000, signing a 30-day note bearing interest at 12 percent a year. The entry to record the payment of the amount due on March 31 will include a debit to Notes Payable for

The total that must be paid when a note becomes due is known as the

Compute the amount of interest owed on a 90-day, 10 percent note for $15,000.

When a note receivable is discounted, the net proceeds are computed by subtracting the discount charges from the ____________________ value of the note.

If the proceeds of a discounted note are less than the face amount, the difference is debited to Interest Expense.

How much interest will accrue on a $20,000 face value, 120-day note that bears interest at 9 percent a year?

A 30-day note dated October 15, would be due on November

The Crown Company had the following transactions involving notes receivable during 2011. Record the transactions on page 7 of a general journal. Omit descriptions.

Compute the maturity value of a 6-month, 9 percent note with a face value of $5,000.

How much interest will accrue on a $40,000 face value, 60-day note that bears interest at 9 percent a year?

Compute the maturity value of a 60-day, 7 percent note with a face value of $6,000.

The Jiminez Company accepted an interest-bearing note to settle a past-due account originating from a sale of merchandise. When the note is collected, the interest earned should be credited to

If the amount of a note is not collected at maturity, the accountant should debit Uncollectible Accounts Expense and credit Notes Receivable.

Interest Expense is usually classified as a(n) ____________________ expense on the income statement.

The face value of a noninterest-bearing note is its maturity value.