Ch. 9 Receivables Part 3 Quiz – Flashcards

The amount of a promissory note is called the

The amount of the promissory note plus the interest earned on the due date is called the

A 60-day, 10% note for $9,000, dated April 15, is received from a customer on account. The face value of the note is

A 60-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

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

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

The journal entry to record a note received from a customer to apply on account is

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

The maturity value of a note receivable is always the same as its face value.

The party promising to pay a note at maturity is the payee.

If the maker of a note fails to pay the debt on the due date, the note is said to be dishonored.

When a note is received from a customer on account, it is recorded by debiting Accounts Receivable and crediting Notes Receivable.

In computing the maturity date of a note, the date the note is issued is included but the due date is omitted.

If a promissory note is dishonored, the payee should not record interest income.