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Exam 14: Notes Receivable and Notes Payable

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Question 41

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For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement that the account in which the account balance is reported, and in Column 4 the account's nature (temporary/permanent). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \\\hline \begin{array} { l } \text { Discount on } \\\text { notes payable }\end{array} & & & & \\\hline\end{array}$

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Question 42

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The interest rate stated on a note for 90 days is:

A) stated on a daily basis.
B) stated on a monthly basis.
C) stated on an annual basis.
D) indeterminable.

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Question 43

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For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement that the account in which the account balance is reported, and in Column 4 the account's nature (temporary/permanent). -

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement that the account in which the account balance is reported, and in Column 4 the account's nature (temporary/permanent). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column } 1 & \text { Column 2 } & \text { Column } 3 & \text { Column } 4 \\\hline \text { Notes receivable } & & & & \\\hline\end{array}$

Purchased merchandise (periodic) issuing a note would have which effect on the categories?

Sold merchandise on account.Assume the periodic method. Debit ________ Credit ________

Trust Worthy Bank accepts a promissory note for $6,000 from a customer on November 1,to be repaid in eight months plus 6% interest.The maturity value of the note is:

Purchased merchandise (perpetual) ,by issuing a note,would have which effect on the categories?

The accounting department forgot to adjust for interest on the note payable.This error would cause:

On November 6,an 10%,90-day,$4,000 note was accepted by Carmen in exchange for merchandise.What entry does Carmen make on December 31 to recognize the interest?

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement that the account in which the account balance is reported, and in Column 4 the account's nature (temporary/permanent). - $\begin{array} { | l | l | l | l | l | } \hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \\\hline \text { Interest expense } & & & & \\\hline\end{array}$

A $12,000,5% note is dated May 18 and is due in 90 days.Using a 360-day year,the maturity value would be:

Find the maturity dates for the following: a)A 103-day note dated April 22. b)A 6-month note dated March 31. c)A 80-day note dated February 12,2016,a leap year.

Using a 360-day year,interest calculated for 90 days on a $9,000,6% promissory note is:

Prepare journal entries for the following transactions for Sysco Imports Company. a)Purchased $6,000 of merchandise (periodic)from Clarke Industries Company on account. b)Gave Clarke Industries Company a 150-day,6% note in settlement of the account payable. c)Sysco defaulted on its note on the maturity date. d)Sysco paid the previously defaulted note plus $25 additional interest.

A note that is not paid on the maturity date is considered discounted.

Given a 360-day year,the interest expense on a $10,000,6%,90-day promissory note payable is:

An advantage of a promissory note receivable over an account receivable is that it:

An adjustment that must be made for the accrued interest on a note receivable would include a:

The maturity date of a 60-day note dated April 5 is June 4.