Lundquist Company received a 60-day, 9% note for $28,000, dated July 23, from a customer on account.
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.
Answer:
a. The due date for the note is September 21, determined as follows:
July ............................................................................... 8 days (31 – 23) August ......................................................................... 31 days September ..................................................................... 21 Total.............................................................................. 60 days b. $28,420 [$28,000 + ($28,000 × 9% × 60 ÷ 360)] c. Sept. 21 Cash 28,420 Notes Receivable 28,000 Interest Revenue 420