Accounting I - Unit 6 Review

Master Marketing signed a $40,000.00, 90-day note at 6% on June 1, 20XX. Master Marketing uses a 360-day year. What is the total amount of interest to be paid on this note?

• $400

• $591.78

• $600

• $2,400

Master Marketing received a payment on a note receivable in the amount of $1,295. Interest on the note receivable was $95. The journal entry to record the payment of the note receivable is:

• debit Accounts Receivable, $1,295; credit Cash, $1,295.

• debit Cash, $1,295; credit Accounts Receivable, $1,295.

• debit Cash, $1,295; credit Interest Income, $95, Notes Receivable, $1,200.

• debit Cash, $1,200, Interest Expense, $95; credit Accounts Receivable, $1,295.

Grandfather Tours signed a $12,000, 180-day note at 9% on March 1, 20XX. Grandfather Tours uses a 360-day year. What is the total amount of interest to be paid on this note?

• $108

• $532

• $540

• $1,080

Grandfather Tours signed a $12,000, 180-day note at 9% on March 1. Grandfather Tours uses a 360-day year. Using this information, what is the maturity date of the note payable?

• August 27

• August 28

• August 29

• August 30

Mountain Business Services signed a $25,000.00 90-day note at 5% on May 1, 20XX. Mountain Business Services uses a 360-day year. What is the total amount of interest to be paid on this note?

• $1,250

• $312.50

• $308.22

• $125

Sports Warehouse received a payment in the amount of $697.50 for a note receivable. Interest on the note receivable was $47.50. The journal entry to record the receipt of payment of the note receivable is:

• debit Cash, $697.50; credit Accounts Receivable, $697.50.

• debit Accounts Receivable, $697.50; credit Cash, $697.50.

• debit Cash, $697.50; credit Interest Income, $47.50, Notes Receivable, $650.00.

• debit Cash, $650.00, Interest Expense, $47.50; credit Accounts Receivable, $697.50.

Sneakers Snack Shop signed a $80,000, 60-day, 7%, interest-bearing note on July 1. What is the maturity date of the note?

• September 2

• September 1

• August 31

• August 30

John's Jean Shop signed a 90-day, 12% note to Denim Warehouse for an extension of time on its account payable in the amount of $4,000. The correct entry for John's Jean Shop to record the note payable for an extension of time is:

• debit Accounts Payable/Denim Warehouse, $4,000; credit Notes Payable, $4,000.

• debit Notes Payable, $4,000; credit Accounts Payable/Denim Warehouse, $4,000.

• debit Notes Payable, $4,120; credit Accounts Payable/Denim Warehouse, $4,120.

• debit Accounts Payable/Denim Warehouse, $4,120; credit Notes Payable, $4,120.

High Country Apparel signed a $75,000, two-year, interest-bearing, 5% note on October 1, 20XX. The maturity value of the note is:

• $75,000

• $78,750

• $80,000

• $82,500

Carson Tyler has an overdue account in the amount of $415.50 with Mountain Oil Company. Mountain Oil Company agrees to accept a note receivable from Carson. The journal entry to record the acceptance of the note receivable is:

• debit Cash, $415.50; credit Accounts Receivable/Carson Tyler, $415.50.

• debit Accounts Receivable/Carson Tyler, $415.50; credit Notes Receivable, $415.50.

• debit Notes Receivable, $415.50; credit Accounts Receivable/Carson Tyler, $415.50.

• debit Accounts Receivable/Carson Tyler, $415.50; credit Cash, $415.50.