NOTE RECEIVABLE 11. Plaza North sells a variety of merchandise to retail stores on open account, but insists that any customer who fails to pay an invoice when due must replace it with an interest-bearing note. The company adjusts and closes it accounts at December 31. Among the transactions relating to notes receivable where the following: Nov. 1. Received from a customer, Hill Stores, a 14% six-month note for $18,000 in settlement of an account receivable due today. May 1. Collected in full the 14% note from Hill Store. a. Prepare the entries to record (1) the receipt of the note on November 1; (2) the adjustment for interest on December 31; and (3) the collection of the note on May 1. b. Assume that instead of paying the note on May 1, Hill Stores had defaulted. 12. During January, Sundown Corporation had net sales of $300,000, the beginning inventory was $100,000, merchandise purchased was $500,000 and a cost of goods available for sale of $600,000. The company consistently earns a gross profit rate of 45%. Using the gross profit method, the estimated inventory at January 31 amounts to.