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.
Answer:
a. The due date for the note is August 7, determined as follows:
April…………………………………………………………………… 21 days (30 – 9)
May……………………………………………………………………. 31 days
June…………………………………………………………………… 30 days
July…………………………………………………………………….
August………………………………………………………….………
31 days
7 days
Total…………………………………………………………………… 120 days
b. $462,000 [$450,000 + ($450,000 × 8% × 120/360)]
c. Aug. 7 Cash 462,000
Notes Receivable 450,000
Interest Revenue 12,000