Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 14, Problem 14.1BE
Bank loan; accrued interest
• LO13–2
On October 1, Eder Fabrication borrowed $60 million and issued a nine-month, 12% promissory note. Interest was payable at maturity. Prepare the
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1 . 3 L23456 Determine the maturity date and compute interest for each note. Days to be used per year 360 days 16 17 Note 1 2 3 Note Contract Date March 11 May 25 October 22 1 2 3 Principal 9 0 Required Determine the maturity date and compute interest for each note. 1 $24,000 24,000 18,000 Interest Rate 5% 7% 4% Period of Note (Term) 60 days 90 days 45 days Contract Date Maturity Date Interest Expense Mar 11 May 25 Oct 22.
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Sunshine Service Center received a $40,000, 120-day, 6% note, dated April 12, from a customer on account. Assume 360 days per year.
a. Determine the due date of the note.
August 10
b. Determine the maturity value of the note.
120
c. Journalize the entry for the receipt of the payment of the note at maturity. If an amount box does not require an entry, leave it blank.
Aug. 10 Cash
Note Receivable
Interest Revenue
Determine due date and interest on notes
Determine the due date and the amount of interest due at maturity on the following notes:
Date of Note
Face Amount
Interest Rate
Term of Note
a. January 5*
$87,000
6%
120 days
b. February 15*
27,000
4
30 days
c. May 19
65,000
8
45 days
d. August 20
32,000
5
90 days
e. October 19 A
48,000
7
90 days
*Assume a non-leap year in which February has 28 days.
Assume 360 days in a year when computing the interest.
Note
a.
b.
C.
d.
e.
Due Date
Interest
Chapter 14 Solutions
Intermediate Accounting, 10 Ed
Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8QCh. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10QCh. 14 - When a notes stated rate of interest is...
Ch. 14 - How does an installment note differ from a note...Ch. 14 - Prob. 14.13QCh. 14 - Prob. 14.14QCh. 14 - Air Supply issued 6 million of 9%, 10-year...Ch. 14 - Both convertible bonds and bonds issued with...Ch. 14 - Prob. 14.17QCh. 14 - Cordova Tools has bonds outstanding during a year...Ch. 14 - If a company prepares its financial statements...Ch. 14 - (Based on Appendix 14A) Why will bonds always sell...Ch. 14 - Prob. 14.21QCh. 14 - Prob. 14.22QCh. 14 - Prob. 14.23QCh. 14 - Bank loan; accrued interest LO132 On October 1,...Ch. 14 - Non-interest-bearing note; accrued interest LO132...Ch. 14 - Determining the price of bonds LO142 A company...Ch. 14 - Determining the price of bonds LO142 A company...Ch. 14 - Effective interest on bonds LO142 On January 1, a...Ch. 14 - Effective interest on bonds LO142 On January 1, a...Ch. 14 - Straight-line interest on bonds LO142 On January...Ch. 14 - Investment in bonds LO142 On January 1, a company...Ch. 14 - Note with unrealistic interest rate LO143 On...Ch. 14 - Installment note LO143 On January 1, a company...Ch. 14 - Prob. 14.12BECh. 14 - Bonds with detachable warrants LO145 Hoffman...Ch. 14 - Convertible bonds LO145 Hoffman Corporation...Ch. 14 - Prob. 14.22ECh. 14 - Prob. 14.36ECh. 14 - Prob. 14.14PCh. 14 - Prob. 14.17PCh. 14 - Prob. 14.21PCh. 14 - Prob. 14.3DMP
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