Details of Notes Receivable and Related Entries Gen-X Ads Co. produces advertising videos. During the current fiscal year, Gen-X Ads Co. received the following notes: Date Face Amount Interest Rate Term 1. Apr. 10 $90,000 4% 60 days 2. June 24 15,600 6 30 days 3. July 1 27,000 6 120 days 4. Oct. 31 27,000 9 60 days 5. Nov. 15 54,000 6 60 days 6. Dec. 27 108,000 4 30 days Required: Assume 360 days in a year. 1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Note (a) Due Date (b) Interest Due at Maturity (1) June 9 $ (2) July 24 (3) Oct. 29 (4) Dec. 30 (5) Jan. 14 (6) Jan. 26 2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank or enter "0". Oct. 29 Accounts Receivable Notes Receivable Interest Revenue 3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Dec. 31 Interest Receivable Interest Revenue 4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. If an amount box does not require an entry, leave it blank or enter "0". Jan. 14 Cash Notes Receivable Interest Receivable Interest Revenue Jan. 26 Cash Notes Receivable Interest Receivable Interest Revenue

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Details of Notes Receivable and Related Entries

Gen-X Ads Co. produces advertising videos. During the current fiscal year, Gen-X Ads Co. received the following notes:

	Date	Face Amount	Interest Rate	Term
1.	Apr. 10	$90,000		4%	60	days
2.	June 24	15,600		6	30	days
3.	July 1	27,000		6	120	days
4.	Oct. 31	27,000		9	60	days
5.	Nov. 15	54,000		6	60	days
6.	Dec. 27	108,000		4	30	days

Required:

Assume 360 days in a year.

1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number.

Note	(a) Due Date	(b) Interest Due at Maturity
(1)	June 9	$
(2)	July 24
(3)	Oct. 29
(4)	Dec. 30
(5)	Jan. 14
(6)	Jan. 26

2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank or enter "0".

Oct. 29	Accounts Receivable
	Notes Receivable
	Interest Revenue

3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31.

Dec. 31	Interest Receivable
	Interest Revenue

4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. If an amount box does not require an entry, leave it blank or enter "0".

Jan. 14	Cash
	Notes Receivable
	Interest Receivable
	Interest Revenue
Jan. 26	Cash
	Notes Receivable
	Interest Receivable
	Interest Revenue

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