Question

Note Receivable Cube Ice Company received a 120-day, 10% note for $96,000, dated April 9 from a customer on account. Assume 360 days in a year. a. Determine the due date of the note. b. Determine the maturity value of the note. $fill in the blank fecf75f93ff9072_2 c. Journalize the entry to record the receipt of the payment of the note at maturity. If an amount box does not require an entry, leave it blank. Aug. 7 fill in the blank ae423a0ac060f98_2 fill in the blank ae423a0ac060f98_3 fill in the blank ae423a0ac060f98_5 fill in the blank ae423a0ac060f98_6 fill in the blank ae423a0ac060f98_8 fill in the blank ae423a0ac060f98_9

Answer 1

Answer: See explanation

Step-by-step explanation:

a. Determine the due date of the note.

The due date will be gotten by calculating the date that will make 120 days starting from April 9th. This will be:

April = 30 - 9 days = 21 days

May = 31 days

June = 30 days

July = 31 days

August = 7th day.

Therefore, August 7 is the due date

b. Determine the maturity value of the note.

Amount of interest on note = 96000 x 10% x 120/360

= 96000 × 0.1 × 1/3

= $3200

Then, Maturity Value will be:

=$96000 + $3200

= $99200

c. Journalize the entry to record the receipt of the payment of the note at maturity.

7th August:

Debit: Cash = $99200

Credit: Note receivable = $96000

Credit: Interest revenue = $3200

(Note receivable realized)