Which of the following statements are true?

1. Interest = Principal Rate Time TRUE
2. An auxiliary record of notes receivable that provides detailed information about the notes held by a business is known as a notes receivable register. TRUE
3. The correct entry to make when a note is paid at maturity depends on whether the note is interest bearing or non-interest bearing. TRUE
4. A 90-day note dated July 9 would be due on October 9. FALSE
5. In preparing the financial statements at the end of the year, the account Accrued Interest Payable is reported on the income statement.
6. The total of the notes payable register should agree with the total of the notes receivable account in the general ledger.
7. When commercial banks deduct interest in advance on a note, the procedure is known as discounting.
8. For notes payable issued in one period and due in the following period, accrued interest payable must be recorded at the end of the period.
9. The amount of interest on a 10% note of $600 dated May 7 and due July 18 would be $12.00.
10. Accrued interest on notes payable is interest expense that has been incurred but not paid.
11. The account, Discount on Notes Payable, is a contra-liability account.
12. An auxiliary record of notes receivable that provides detailed information about the notes held by a business is known as a notes receivable register.
13. Under accrual accounting, revenue is recognized when it is earned; therefore, accrued interest must be recorded at the end of the period.
14. To obtain an extension of time for the payment of an account, a customer may issue a note for all or part of the amount due.
15. If the maker of a note refuses or is unable to pay or renew it at maturity, the note is said to be dishonored.
16. The stated rate of interest is always the same as the effective rate of interest.
17. An auxiliary record of notes payable that provides detailed information about the notes owed by a business is known as a notes payable journal.
18. A promissory note is usually referred to as a "note."
19. Maturity value is equal to face value plus interest.
20. In preparing the financial statements at the end of the year, the balance in the interest receivable account will be reported on the balance sheet as a current asset.
21. The net amount received from the bank on a discounted note receivable is called the proceeds.
22. On a non-interest bearing, discounted note, it is possible for the stated interest rate to differ from the effective interest rate.
23. A promissory note may be interest bearing or non-interest bearing.
24. The maker of the note is the one who is to receive the specified amount of money.
25. The maker of the note is the one who promises to pay a certain amount of money at a definite future time.
26. When the term of a note is specified in days, time is computed using the exact number of days from the date of the note to the date of its maturity.

1. A debit balance in the discount on notes payable account will normally become a debit to Interest Expense.
2. In computing interest, it is customary to consider 360 days as a year.
3. When a bank collects a notes receivable, it notifies the payee that the net amount has been added to the payee's account by using a credit advice.
4. A written promise to pay a specific sum of money at a definite future date is called a promissory note.
5. If the time of the note is stated in days, the due date is the specified number of days after the issue date.
6. The proper entry to make when a note is paid at maturity depends on whether it is an interest-bearing or a non-interest-bearing note.