Question

Vauxall Holdings showed the following information regarding its notes receivable:

Note	Date of Note	Principal	Interest Rate	Term	Maturity Date	Days of Accrued Interest at Dec. 31, 2017	Accrued Interest at Dec. 31, 2017
1	Nov. 1/16	$320,000	4.0%	180 days
2	Jan. 5/17	132,000	5.0%	90 days
3	Nov. 20/17	122,000	4.5%	45 days
4	Dec. 10/17	160,000	5.5%	30 days

Required:
For each of Vauxall Holdings note receivable given below: (Use 365 days in a year. Do not round intermediate calculations. Round the "Amount of Accrued Interest at Dec. 31, 2017" answers to 2 decimal places.)
a. Determine the maturity date.
b. Calculate the days of accrued interest, if any, at December 31, 2017 (Vauxall Holdings' year-end).
c. Calculate the amount of accrued interest, if any, at December 31, 2017.



For Note 3:
d. Prepare the entry to record the accrued interest at December 31, 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Use 365 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places.)



e. Prepare the entry to record the collection on the maturity date. Assume that both interest and principal are collected at maturity. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Use 365 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Answer 1

Answer to Requirement a.

Note 1:
Date of Note = Nov 1, 2016
Term = 180 days
Maturity Date = November (29 days) + December (31 days) + January (31 days) + February (28 days)+ March (31 days) + April (30 days)
Maturity Date = April 30, 2017

Note 2:
Date of Note = Jan 5, 2017
Term = 90 days
Maturity Date = January (26 days) + February (28 days)+ March (31 days) + April (5 days)
Maturity Date = April 5, 2017

Note 3:
Date of Note = Nov 20, 2017
Term = 45 days
Maturity Date = November (10 days) + December (31 days) + January (4 days)
Maturity Date = January 4, 2018

Note 4:
Date of Note = Dec 10, 2017
Term = 30 days
Maturity Date = December (21 days) + January (9 days)
Maturity Date = January 9, 2018

Answer to Requirement b.

Note 1:
Days of Accrued Interest at December 31, 2017 = 0 days

Note 2:
Days of Accrued Interest at December 31, 2017 = 0 days

Note 3:
Days of Accrued Interest at December 31, 2017 = November (10 days) + December (31 days) = 41 days

Note 4:
Days of Accrued Interest at December 31, 2017 = December (21 days) = 21 days

Answer to Requirement c.

Note 1:
Amount of Accrued Interest at December 31, 2017 = $0

Note 2:
Amount of Accrued Interest at December 31, 2017 = $0

Note 3:
Amount of Accrued Interest at December 31, 2017 = $122,000 * 4.50% * 41/365
Amount of Accrued Interest at December 31, 2017 = $616.68

Note 4:
Amount of Accrued Interest at December 31, 2017 = $160,000 * 5.50% * 21/365
Amount of Accrued Interest at December 31, 2017 = $506.30

Answer to Requirement d.