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Cairo Co.accepted a 5000$ , 12% , 90 day note dated May 16 from Alexandria Co. as an exchange for its past due accounts receivable. Make the neccessary general journal entries for Cairo Co. on May 16 and the August 14 maturity date, assuming that the:

14. What is the due date?

15. Which of the following is correct? The entry to record the note is:

a. Debit NR and credit sales for $5,000

b. Debit NR and credit sales for $5,150

c. Debit NR and credit accounts receivable for $5,000

D.Debit NR and credit accounts receivable for $5,150

16. Note is held until maturity and collected in full at that time, the entry would be?

a. Debit cash 5,150, credit accounts receivable $5000, and credit interest revenue 150

b. Debit cash 5,000, credit note receivable $5000, and credit interest revenue 150

c. Debit cash 5,150, credit accolmts receivable $5150

d. Debit cash 5,150, credit note receivable $5150

17. T/F If the note is dishonored cash would be turned into accounts receivable

and all the remaining entries would be the same.

18. T/F A company factored $100,000 of accounts receivable at a fee of 5%.

The entry to record the sale would be a debit to cash for $100,000, credit to accounts

receivable for $95,000 and a credit to factor fee expense for $5,000.

19. T/F Pledging accounts receivable is the same as factoring accounts receivable.

20. T/F Recording a credit card sales is the same as recording an ordinary sale

on account or cash except for the fact that the credit card fee must be deducted om the

cash or accounts receivable at the date of the sale.

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