Question :
101. On October 1, Black Company receives a 6% interest bearing : 1247201
101. On October 1, Black Company receives a 6% interest bearing note from Reese Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of
A. $0
B. $100
C. $300
D. $600
102. 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
103. The journal entry to record a note received from a customer to apply on 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
104. A $6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize 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
105. On November 1, Kim Company accepted a 3-month note receivable as payment for services provided to Hsu Company. The terms of the note were $10,000 face value and 6% interest. Kim Company closes its books at December 31 and does not use reversing entries. On February 1, the journal entry to record the collection of the note should include a credit to
A. Notes Receivable for $10,150
B. Interest Receivable for $150
C. Interest Revenue for $150
D. Interest Revenue for $50
106. A note receivable or promissory note
A. has the party to whom the money is due as the maker.
B. is not a formal credit instrument.
C. cannot be factored to another party.
D. may be used to settle an accounts receivable.
107. 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.
108. Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts 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
Interest Revenue 90
D. Notes Receivable 6,000
Interest Revenue 90
Accounts Receivable—Dame Company 6,000
Interest Receivable 90
109. 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.
110. Harper Company lends Hewell Company $40,000 on March 1, accepting a four-month, 6% interest note. Harper Company prepares financial statements on March 31. What adjusting entry should be made before the financial statements can be prepared?
A. Cash 200
Interest Revenue 200
B. Interest Receivable 800
Interest Revenue 800
C. Interest Receivable 200
Interest Revenue 200
D. Note Receivable 40,000
Cash 40,000
