Answer with its Explanation:
Requirement A. The due date would be almost four month from today which means that the day would be August 9 but we will deduct 1 day for May, 1 day for July and 1 day for August. The due date would be August 7.
Mathematically,
Due Date = April 9 + 120 days
= August 7
Requirement B. The maturity value would be the principle value plus the interest accrued which can be written as under:
Maturity value = Principle Value + Interest Accrued
= $12,000 + ($12,000 * 9% * 120 days / 360 days)
= $12,000 + $360
= $12,360
Requirement C. The journal entry to record the receipt of the payment of the note will increase the cash asset, reduce the Note receivable and the interest revenue will be increased as well.
The journal entry is given as under:
Dr Cash $12,360
Cr Notes Receivable $12,000
Cr Interest revenue $360
