Question : Learning Objective 4-5 1) Ace Electronics accepted a promissory note from : 1253215

Learning Objective 4-5

1) Ace Electronics accepted a promissory note from Fenstermaker, who promised to pay Ace $2,000 plus 6% interest at the end of six months. The maker of the note is ________ and the payee is _________.

A) Fenstermaker; Ace Electronics

B) Fenstermaker; Fenstermaker

C) Ace Electronics; Ace Electronics

D) Ace Electronics; Fenstermaker

2) Ace Electronics accepted a promissory note from Fenstermaker, who promised to pay Ace $2,000 plus 6% interest at the end of six months. What is the amount of interest that will be paid at the end of the six-month period?

A) $120

B) $240

C) $60

D) $2,060

3) Ace Electronics accepted a promissory note from Fenstermaker, who promised to pay Ace $2,000 plus 6% interest at the end of six months. When Ace first accepts the note, it should record ________.

A) a note payable of $2,000

B) a note receivable of $2,000

C) a note payable of $2,060

D) a note receivable of $2,060

4) Ace Electronics accepted a promissory note from Fenstermaker, who promised to pay Ace $2,000 plus 6% interest at the end of six months. When Ace first accepts the note, it should record interest receivable of ________.

A) $120

B) $0

C) $60

D) $240

5) Ace Electronics accepted a promissory note from Fenstermaker, who promised to pay Ace $2,000 plus 6% interest at the end of six months. When Fenstermaker first gives Ace the note, Fenstermaker should record ________.

A) a note payable of $2,000

B) a note receivable of $2,000

C) a note payable of $2,060

D) a note receivable of $2,060

6) Acme, Inc. accepted a promissory note from NadirCo, who promised to pay Acme $5,000 plus 6% interest at the end of four months. What is the amount of interest that will be paid at the end of the four-month period?

A) $300

B) $100

C) $600

D) $5,000

7) Acme, Inc. accepted a promissory note from NadirCo, who promised to pay Acme $5,000 plus 6% interest at the end of four months. When Acme first accepts the note, it should record a ________.

A) note payable of $5,000

B) note receivable of $5,000

C) note payable of $5,100

D) note receivable of $5,150

8) Acme, Inc. accepted a promissory note from NadirCo, who promised to pay Acme $5,000 plus 6% interest at the end of four months. When Acme first accepts the note, it should record Interest receivable of ________.

A) $300

B) $100

C) $0

D) $150

9) Acme, Inc. accepted a promissory note from NadirCo, who promised to pay Acme $5,000 plus 6% interest at the end of four months. When NadirCo first gives Acme the note, NadirCo should record a ________.

A) note payable of $5,000

B) note receivable of $5,000

C) note payable of $5,100

D) note receivable of $5,100

10) Acme, Inc. accepted a promissory note from NadirCo, who promised to pay Acme $5,000 plus 6% interest at the end of four months. When NadirCo pays the note, Acme will receive ________.

A) $5,000

B) $5,300

C) $5,100

D) $5,150

11) Accounts receivable are interest-bearing, while notes receivable are not.

12) The amount of interest revenue recorded during a single month on a 6%, 3-month note receivable will be the same as the interest revenue on a 6%, 6-month note receivable.

13) The interest revenue from a 6%, 2-year note receivable will not be recorded until the year the interest is collected.

14) Notes receivable usually have a collection period that is longer than accounts receivable.