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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

On March 11, Rainz Company received a 90-day, 6 percent note for $1,500, dated March 11, from J. Rose, a charge customer, to satisfy his open account receivable.

  1. a. What is the due date of the note?
  2. b. How much interest is due at maturity?

Given the preceding data, write entries in general journal form on the books of Rainz Company to record the following:

  1. c. Receipt of the note from J. Rose in settlement of his account.
  2. d. Receipt of the principal and interest at maturity.

Given the same data, write entries in general journal form on Rose’s books to record the following:

  1. e. Issuance of the note by Rose in settlement of his account.
  2. f. Payment of the note at maturity.

Check Figure

(d) Interest Income, $22.50

a.

To determine

Compute the due date of the note.

Explanation

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

Compute the due date for the note received on March 11 with the life of note for 90 days.

Description Count
Number of days left in March (From 11th to 31st...

b.

To determine

Compute the interest to be received on due date.

c.

To determine

Journalize the receipt of note in settlement of account.

d.

To determine

Journalize the collection of principal and interest on the note on June 9.

e.

To determine

Journalize the issuance of note in settlement of account.

f.

To determine

Journalize the payment of principal and interest on the note on June 9 (maturity date).

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