11) A debtor and a creditor record the same note, respectively, as a:
A) note receivable and note payable.
B) note receivable and account receivable.
C) note payable and note receivable.
D) note payable and account payable.
12) On May 1, 2015, Continental Bank drafted a $5,000 personal loan for a customer. The loan is due in one year with 8% interest. What journal entry should the bank prepare on May 1, 2015?
A) Debit Cash for $5,000 and credit Notes Payable for $5,000.
B) Debit Accounts Receivable for $5,000 and credit Service Revenue for $5,000.
C) Debit Notes Receivable for $5,000 and credit Cash for $5,000.
D) Debit Cash for $5,000 and credit Accounts Receivable for $5,000.
13) Emporium Bank lends money to a customer on a six month note. What journal entry does the bank prepare?
A) debit Note Receivable and credit Service Revenue
B) debit Cash and credit Note Payable
C) debit Note Receivable and credit Cash
D) debit Cash and credit Note Receivable
14) On October 1, 2015, the Early Bank lends money to a customer on a six month note. The bank accrues interest on the note at December 31, 2015. The journal entry on December 31, 2015 by the bank would include a:
A) debit to Cash and a credit to Interest Revenue for three months of interest.
B) debit to Cash and a credit to Interest Payable for three months of interest.
C) debit to Interest Receivable and a credit to Interest Revenue for three months of interest.
D) debit to Interest Revenue and a credit to Interest Receivable for three months of interest.
15) Fourth Company receives a note from a customer for a $5,000 sale. On the date of sale, what journal entry did Fourth Company prepare?
A) debit Accounts Receivable for $5,000 and credit Sales Revenue for $5,000
B) debit Notes Receivable for $5,000 and credit Cash for $5,000
C) debit Notes Receivable for $5,000 and credit Sales Revenue for $5,000
D) debit Cash for $5,000 and credit Notes Receivable for $5,000
16) If a company receives a note receivable on account, what journal entry is prepared?
A) debit Accounts Receivable and credit Notes Payable
B) debit Notes Receivable and credit Sales Revenue
C) debit Cash and credit Accounts Receivable
D) debit Notes Receivable and credit Accounts Receivable
17) The journal entry to record accrued interest on a note receivable at year end is:
A) debit Interest Receivable and credit Interest Revenue.
B) debit Note Receivable and credit Interest Revenue.
C) debit Interest Receivable and credit Note Receivable.
D) debit Cash and credit Interest Receivable.
18) Lennon Company signed a month, $50,000, 8% note on June 1, 2015. The amount of interest to be accrued on December 31, 2015, is (round to nearest dollar):
A) $333.
B) $1,667.
C) $2,333.
D) $4,000.
19) The maturity value of a $50,000 note at 11% for 5 months is (round to nearest dollar):
A) $50,000.
B) $52,292.
C) $53,208.
D) $55,500.
20) The due date of a 120 day, 10% note for $30,000, dated May 12 is:
A) September 9.
B) September 10.
C) September 11.
D) September 12.