Discounting of note receivable with recourse A P1,800,000, 6-month, 10% note dated March 1 is received from a customer by an entity and discounted by First Bank on May 1 at 12%. Compute for; Maturity value Discount Net proceeds
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II- Discounting of note receivable with recourse
A P1,800,000, 6-month, 10% note dated March 1 is received from a customer by an entity and
discounted by First Bank on May 1 at 12%.
Compute for;
- Maturity value
- Discount
- Net proceeds
- Term of note
- Discount period
- Gain or loss on note receivable discounting
Step by step
Solved in 3 steps
- A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest ExpenseA P2,400,000, 6-month, 10% note dated May 1 is received from a customer by an entity and discounted with recourse by First Bank on July 1 at 12%. Based on conditional sale, compute for the following; a. Net proceeds b. Discount period c. Carrying amount of note receivable d. Gain or loss on note receivable discounting e. Journal entry for the conditional sale f. Journal entry, note is paid by maker on maturity g. Journal entry, note is dishonored by maker, entity pays the Bank the maturity value plus protest fee and other bank charges of P5,200.II- Discounting of note receivable with recourse A P1,800,000, 6-month, 10% note dated March 1 is received from a customer by an entity and discounted by First Bank on May 1 at 12%. Term of note Discount period Gain or loss on note receivable discounting
- Discounting of note receivable without recourse; A P2,500,000, 180-day, 10% note dated August 1 was received from a customer and discounted without recourse on September 30 at 12% discount rate. Compute for; Maturity value Discount Discount period Net proceeds from discounting Carrying amount of the notes receivable Gain or loss on note discounting (journal entry)GRANT COMPANY accepted from a customer a P 5,000,000, 90-day, 12% interest bearing dated October 31, 2021. On November 30, 2021, the entity discounted the note with recourse at the DHVSU State Bank at 15% What is the amount received from the discounting of notes receivable? What is the loss on note receivable discounting?9. A flood recently destroyed many of the financial records of Yakal Company. The entity uses an average cost inventory valuation system. Yakal make a physical count at the end of each month in order to determine monthly inventory value. By examining various documents, the following data are gathered: Ending inventory at July 31 Total cost of units available for sale in July Cost of goods sold during July Cost of beginning inventory, July 1 Gross profit on sales for July 60,000 units 1,452,100 1,164,100 4,00 per unit 935,900 July purchases: Units Unit cost Total cost July 5 55,000 53,000 45,000 5.10 280,500 11 5,00 265,000 15 5,50 247,000 16 47,000 5,30 249,000 200,000 Under FIFO-perpetual, cost of goods sold is equal to 1,042,100
- 2. Assume the following information regarding a note received by HEERHUM YU Company: P1,500,000 October 1, 2020 120 days December 1, 2020 Principal amount of note receivable Date of note Term of note Date of discounting Discount rate 12% Interest income for 120 days P50,000 Compute the interest rate charged to customer. How much is the principal amount of the note receivable?A company collects an honored note with a maturity date of 24 months from establishment, a 10%interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of thehonored note at maturity date?A. Interest Revenue, Interest Expense, CashB. Interest Receivable, Cash, Notes ReceivableC. Interest Revenue, Interest Receivable, Cash, Notes ReceivableD. Notes Receivable, Interest Revenue, Cash, Interest Expense3. Assume the following information regarding a note received by LENDYOU Company: January 1, 2020 6 months Date of note Term of note Interest rate 12% Date of discounting Discount rate March 1, 2020 15% Accrued interest on note P15,000 How much is the carrying amount of the note receivable on March 1, 2020?
- CASE 2 Rusty, Inc. reports gross profit on installment basis. The following data are available: 20X2 P500,000 362,500 137,500 20X1 20X3 Sales P480,000 360,000 120,000 P600,000 432,000 168,000 Cost of Sales Gross profit Cash Collections 150,000 95,000 From 20x1 Sales 90,000 145,000 160,000 125,000 From 20x2 Sales From 20x3 Sales Defaults 25,000 13,000 Unpaid balance of 20x1 installment contracts Value assigned to repossessed merchandise Unpaid balance of 20x2 installment contracts Value assigned to repossessed merchandise 30,000 12,000 32,000 18,000 REQUIRED: 3. Total realized gross profit before loss on repossession for 20x3 4. Loss on repossession for 20x3On January 16, K Corp, accepted a P600,000, 9%, 90 day note from a customer. On February 10, the note was discounted at 12%. Assume the note was discounted on a without recourse basis. Compute for the cash received from discounting.a. 613,500b. 600,000c. 600,207.50d. 595,095 Gain (or Loss) on notes receivable discountinga. (3,542.50)b. 207.50c. 13,500d. 3,750 Assume that the note was discounted with recourse and treat the discounting as a conditional sale. Compute for the gain (or loss) on notes receivable financingNates Payable A business issued a 90-day, 6% nole for $67,000 bo a creditor on account, [llustrate the effacts on the accounts and finannal statamants of recording (a) L'ie ssuance at the note and (b) the payment of the rote at maturity, including interest If ne accaunt or activity is affacted, selact "Na affect from the drapdewn list and eave the correspording umber entry box alar k. Enter account cecreeses end cash outfiows as negative amcunts.
