Question

Determining Maturity Date

Find the maturity date of the following:

120-day note dated May 16

90-day note dated November 9

Calculate Maturity Value

Find the maturity value of the following:

$8,800 6% 9 months

$12,000 2% 75 days

Journalizing Notes for Buyer and Seller

For each of the following transactions for Jackson Co. (the seller), journalize what the entry would be for the buyer (North Co.). Jackson Company uses the periodic method.

Accounts Receivable, North Co. 7,800

   Sales 7,800

Sold on account to North Co.   

Notes Receivable 7,800

  Accounts Receivable, North Co. 7,800   

  Transferred to Notes Receivable

Cash 7,906   

  Notes Receivable 7,800

  Interest Income 106

Note paid by North Co. on due date

Answer 1

Determining maturity dates
	Maturity dates
120 days note dated May 16	13 th Sep.
90 day note dated November 9	7th Feb.
Calculation of maturity value
$8800 6% 9 months
Interest = [$8800 * 6%]/12 months * 9 months =		$396.00
Face value of note		$8,800.00
Maturity value		$9,196.00
$12000 2% 75 days
Interest = [$12000 * 2%]/365 days * 75 days =		$49.32
Face value of note		$12,000.00
Maturity value		$12,049.32
Journal entries in the books of North Co.
Account Titles	Debit	Credit
Purchases	$7,800.00
Accounts Payable,Jackson Co.		$7,800.00
(purchase on account from Jackson Co.)
Accounts Payable,Jackson Co.	$7,800.00
Notes Payable		$7,800.00
(Transaferred to Notes Payable)
Notes Payable	$7,800.00
Interest Expense	$106.00
Cash		$7,906.00
(Note paid on due date)