Exhibit 6-1

OMartin& Lowry, Inc. accepted a $150,000, 8%, 90-day note receivable for services rendered to a client. Thirty days later, OMartin& Lowry discounted the note at a bank at 10%. Assume interest has not been recognized for the first month.

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100.Refer to Exhibit 6-1. The entry to record the proceeds from the sale of the note would include a

	a.	debit to Notes Receivable for $150,000.
	b.	debit to Cash for $145,000.
	c.	credit to Interest Receivable for $1,000.
	d.	credit to Interest Revenue for $1,000.

101.Refer to Exhibit 6-1. The entry to record the proceeds from the sale of the note would include a

	a.	debit to Cash for $150,150.
	b.	debit to Cash for $150,450.
	c.	credit to Interest Receivable for $1,000.
	d.	credit to Interest Expense for $1,000.

102.On September 1, 2015, Excellent Company received an $80,000, 12%, 120-day note from a credit customer wishing to extend its repayment period. On October 1, 2015, thirty days after the note was received, Excellent discounted the note at the bank at 14%. How much cash did Excellent Company receive from the bank?

	a.	$80,800
	b.	$80,749
	c.	$80,288
	d.	$79,317

103.On June 11, Nathan, Inc. accepted a $8,000, 7%, 60-day note from a customer. On June 26, the company discounted the note at the bank at 10%. The proceeds amounted to

	a.	$8,101.17
	b.	$7,992.16
	c.	$8,093.33
	d.	$8,000.00

104.On October 1, Robins's Online Sales sold goods for $50,000 and accepted a six-month noninterest-bearing note. Current interest rates were 10%. The December 31 adjusting entry should be

	a.	?Interest Receivable 2,500 Interest Revenue 2,500 ?
	b.	?Discount on Notes Receivable 1,250 Interest Revenue 1,250 ?
	c.	Discount on Notes Receivable 2,500 Interest Receivable 2,500
	d.	Interest Revenue 1,250 Discount on Notes Receivable 1,250

105.On May 17, Bruno Olive Co. accepted a $6,500, 8%, 90-day note from a customer. On June 11, the note was discounted at 10%. At maturity date, the note was dishonored and the bank charged a $25 protest fee. The amount that Bruno Olive Co. would debit to Notes Receivable Dishonored is

	a.	$6,655.00
	b.	$6,535.29
	c.	$6,525.00
	d.	$6,130.00

106.Which statement concerning notes receivable is false?

	a.	Notes receivable initially should be recorded at the present value of the future cash receipts.
	b.	All notes implicitly includeinterest.
	c.	The account Discount on Notes Receivable is a contra-revenue account .
	d.	The account Notes Receivable Dishonored is an asset account.

107.When a company sells a customer's note to a bank, the discount period is the length of time

	a.	from the date of discount to the date of sale.
	b.	from the date of sale to the issue date.
	c.	from the date of discount to the maturity date.
	d.	from the date of discount to the issue date.

108.When a company sells a customer's note to a bank, the discount rate is

	a.	the interest rate charged by the bank.
	b.	the interestrate charged to the customer.
	c.	an unstated implicit interest rate.
	d.	the effective annual interest rate.

109.The entry to replenish the petty cash fund for $250 of various minor expenses would include a

	a.	debit to Petty Cashfor $250.
	b.	debit to Cashfor $250.
	c.	credit to Petty Cashfor $250.
	d.	credit to Cashfor $250.

110.Assume that the custodian of a $500 petty cash fund has $62 in currency plus $412 in receipts at the end of the month. The entry to replenish the petty cash fund will include

	a.	a credit to Cash for $412.
	b.	a credit to Cash Short and Over for $26.
	c.	a debit to Petty Cash for $438.
	d.	a credit to Cash for $438.