   Chapter D, Problem 2P

Chapter
Section
Textbook Problem

Andy Cooke gave a 60-day, 5.5 percent note, dated February 14, to Key Company, a creditor, in the amount of $10,500. a. What is the due date of the note? b. How much interest is to be paid on the note at maturity? c. Write the entries in general journal form to record issuance of the note by the maker and payment of the note at maturity as they would appear on Cooke’s books. Check Figure(c) 4/15 Cash,$10,596.25

a.

To determine

Compute the maturity date of the note.

Explanation

Maturity date: The date on which the borrower should pay the principal amount of loan, or bond, is referred to as maturity date.

Compute the maturity date for the note issued on February 14 with the life of note for 60 days.

 Description Count Number of days left in February (Fro...

b.

To determine

Compute the interest to be paid on the given note.

c.

To determine

Journalize the issuance of note, and payment of note at maturity.

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