Asked by Pablo Porcayo on Jun 22, 2024
Verified
Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day,6% promissory note for the $4,000.Food Supplier's journal entry to record the collection on the maturity date is: (Use 360 days a year.)
A) Debit Cash $4,060; credit Notes Receivable $4,060
B) Debit Notes Receivable $4,000; credit Cash $4,000
C) Debit Cash $4,000; debit Interest Receivable $60; credit Sales $4,060
D) Debit Notes Receivable $4,060; credit Sales $4,060
E) Debit Cash $4,060; credit Interest Revenue $60; credit Notes Receivable $4,000
Promissory Note
An economic vehicle that holds a firm promise made by one individual to another, obligating the former to deliver a certain amount of money, either when asked or at a future time that has been set in advance.
Interest Revenue
Income earned from lending money or other financial assets that generate interest.
Maturity Date
The specified date when the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.
- Estimate the payback amount of notes receivable at maturity and document the interest earnings.
Verified Answer
Learning Objectives
- Estimate the payback amount of notes receivable at maturity and document the interest earnings.
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