Accounting for notes receivable (Learning Objective 6) 15–20 min.

On September 30, 2014, Citibank loaned $800,000 to George Wells on a one-year, 9% note.

Requirements 1. Compute the interest for the years ended December 31, 2014 and 2015, on the Wells note. Round interest calculations to the nearest dollar.

2. Which party has

a. a note receivable?

b. a note payable?

c. interest revenue?

d. interest expense?

3. How much in total would Wells pay the bank if he pays off the note early on April 30, 2015?

AppendixLO1