111.On October 1, Black Company receives a 9% interest-bearing note from Reese Company to settle a $20,000account receivable. The note is due in six months. At December 31, Black should record interest revenue of
a.$0
b. $450
c. $900
d. $1,800
112.If the maker of a promissory note fails to pay the note on the due date, the note is said to be
a.displaced
b.disallowed
c.dishonored
d.discounted
113.The journal entry to record a note received from a customer to replace an account is
a.debit Notes Receivable; credit Accounts Receivable
b.debit Accounts Receivable; credit Notes Receivable
c.debit Cash; credit Notes Receivable
d.debit Notes Receivable; credit Notes Payable
114.A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry torecognize this event is
a.debit Cash, $6,120; credit Notes Receivable, $6,120
b.debit Accounts Receivable, $6,120; credit Notes Receivable, $6,000; credit Interest Receivable, $120
c.debit Notes Receivable, $6,060; credit Accounts Receivable, $6,060
d.debit Accounts Receivable, $6,120; credit Notes Receivable, $6,000; credit Interest Revenue, $120
115.When referring to a note receivable or promissory note
a.the maker is the party to whom the money is due
b.the note is not considered a formal credit instrument
c.the note cannot be factored to another party
d.the note may be used to settle an accounts receivable
116.When a company receives an interest-bearing note receivable, it will
a.debit Notes Receivable for the maturity value of the note
b.debit Notes Receivable for the face value of the note
c.credit Notes Receivable for the maturity value of the note
d.credit Notes Receivable for the face value of the note
117.Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an openaccounts receivable. What entry will Paper Company make upon receiving the note?
a.
|
Notes Receivable 6,000
Accounts Receivable—Dame Company 6,000
|
b.
|
Notes Receivable 6,090
Accounts Receivable—Dame Company 6,090
|
c.
|
Notes Receivable 6,090
Accounts Receivable—Dame Company 6,000
InterestRevenue 90
|
d.
|
Notes Receivable 6,000
Interest Revenue 90
Accounts Receivable—Dame Company 6,000
InterestRevenue 90
|
118.The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is
a. $40,000
b. $40,400
c. $43,600
d. $44,000
119.Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. HarperCompany prepares financial statements on March 31. What adjusting entry should be made before the financialstatements can be prepared?
a.Cash200
Interest Revenue200
b. Interest Receivable
Interest Revenue
|
800
|
800
|
c. Interest Receivable
Interest Revenue
|
200
|
200
|
d. Note Receivable
Cash
|
40,000
|
40,000
|
120.On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to HsuCompany. The terms of the note were $20,000 face value and 6% interest. On October 30, the journal entry torecord the collection of the note should include a
a.credit to Notes Receivable for $20,300
b.debit to Interest Receivable for $300
c.credit to Interest Revenue for $300
d.debit to Notes Receivable for $20,000