Accounting for notes receivable (Learning Objective 6) 20–25 min.

The Oklahoma City Insurance Agency received the following notes during 2014:

(1)

(2)

(3)

Note Nov 5 Nov 30 Dec 7 Date

$20,000

$ 6,000

$12,000 Principal 9%

13%

11%

Interest Rate 1 year 9 months 60 days Term Requirements 1. Identifying each note by number, compute the total interest on each note over the note term using a 360-day year, and determine the due date and maturity value of each note. Round interest calculations to the nearest dollar.

2. Journalize a single adjusting entry on December 31, 2014, to record accrued interest revenue on all three notes. Round interest calculations to the nearest dollar.

Explanations are not required.

3. For note (1), journalize the collection of principal and interest at maturity.

Explanations are not required.

AppendixLO1