a 120-day, 6% note for $40,000, dated April 12 from a customer on Acerey 3. Suns

Question

a 120-day, 6% note for $40,000, dated April 12 from a customer on Acerey 3. Sunshine Serv received account. C5rin 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. Matching Match each of the following terms associated with the best description of that ternm. a. Accounts Receivable Turnover f. Direct Write-off Method g. Allowance for Doubtful Accounts h. Bad Debt Expense i. Factoring Net Realizable Value Accounts Receivable b. d. Aging Report e. Receivables . A receivable created from selling merchandise or services on account. 2. A list of customer accounts sorted by age classes. 3. A contra asset that represents the amount of estimated uncollectible receivables at a specific date. 4. Records bad debt expense only when a specific customer's account is deemed worthless. 5. Operating expense recorded as a result of receivables becoming uncollectible.

Explanation / Answer

Solution :

3. a. Due date = 10 th August

b. Maturity value = 40,000 + 40,000 x 6% x 120/365

= 40,789

c. Journal Entry

Cash. Dr. 40,789

To Notes receivable. 40,000

To interest income. 789

4. C ---- 1

d ----- 2

g ----- 3

f ----- 4

h ----- 5

b ----- 6

i ------ 7

e ----- 8

a ----- 9

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