Notes Receivable Calculations

P 4. Rich Importing Company engaged in the following transactions involving

promissory notes:

May 3 Sold engines to Kabel Company for $30,000 in exchange for a 90-day, 11 percent promissory note.

16 Sold engines to Vu Company for $16,000 in exchange for a 60-day, 12 percent note.

31 Sold engines to Vu Company for $15,000 in exchange for a 90-day, 10 percent note.

Required

1. For each of the notes, determine the (a) maturity date, (b) interest on the note, and (c) maturity value.

2. Assume that the fiscal year for Rich Importing Company ends on June 30. How much interest income should be recorded on that date?

3. What are the effects of the transactions in May on cash flows for the year ended June 30?