On June 30, 2010, Nature Bank loaned $2,000,000 to Gary Simon on a one-year, 7% note.

Requirements 1. Compute the interest for the years ended December 31,2010 and 2011, on the Simon note.

2. Which party has

a. a note receivable?

b. a note payable?

c. interest revenue?

d. interest expense?

3. How much in total would Simon pay the bank if he pays off the note early— say, on January 31, 2011 ? Journalize the following transactions of Coral, Inc., which ends its accounting year on April 30:

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Feb 1 Loaned $15,000 cash to Carrall Fadal on a one-year, 10% note. Apr 6 Sold goods to Lawn Pro, receiving a 90-day, 4% note for $6.000. 30 Made a single compound entry to accrue interest revenue on both notes. Use a 360-day year for interest computations.