Lone Star Company received a 90-day, 6% note for $80,000, dated March 12 from a

Question

Lone Star Company received a 90-day, 6% note for $80,000, dated March 12 from a customer on account. (Assume a 360-day year when calculating interest.)

Required:

Journalize the entry to record the receipt of the payment of the note at maturity. Refer to the Chart of Accounts for exact wording of account titles. * There should be 3 rows in the Journal.

Chart of Accounts ...

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. Refer to the Chart of Accounts for exact wording of account titles. * There should be 3 rows in the Journal.

Chart of Accounts ...

ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Alan Albertson 122 Accounts Receivable-Jim Dobbs 123 Accounts Receivable-John Groves 124 Accounts Receivable-Jan Lehn 125 Accounts Receivable-Jacob Marley 126 Accounts Receivable-Mr.Potts 127 Accounts Receivable-Chad Thomas 128 Accounts Receivable-Andrew Warren 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Inventory 145 Supplies 151 Prepaid Insurance 181 Land 191 Equipment 192 Accumulated Depreciation LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense 523 Delivery Expense 524 Repairs Expense 531 Rent Expense 533 Insurance Expense 534 Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense

Explanation / Answer

1. Due date = 10 June

2 Maturity value = (80000*6%*90/360)+80000 = 81200

3) Journalize the entry to record the receipt of the payment of the note at maturity

Date Accounts & explanantion debit credit 10 June Cash a/c 81200 Notes receivable a/c 80000 Interest revenue a/c 1200 (To record receipts on maturity)

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.