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On November 16, Jackson Lawless, Inc. made a cash loanto a customer andreceived a...On...

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Accounting

  1. On November 16, Jackson Lawless, Inc. made a cash loanto a customer and

received a $ 240,000 a 60 day10% note. What is the maturity date and the

            maturity value of the note?

            Give the necessary adjusting entry on December 31:

           Give the journal entry for the maturity date for Jackson Lawless,Inc.

Answer & Explanation Solved by verified expert
4.4 Ratings (713 Votes)

a)Maturity Date : 16November + 60 days = 15 Jan

Maturity value of note = Principal amount + interest accrued

                     = 240000 + (240000 *10%*6/365)

                     = 240000+ 3945.21

                     = 243945.21 (rounded to 243945)

DATE ACCOUNT TITLE DEBIT CREDIT
NOV 16 Note receivable 240000
cash 240000
December 31 Interest receivable 2959
Interest revenue 2959
[Being interest accrued for 45 days :240000*.10*45/365]
15Jan (next year) cash 243945
Interest receivable 2959
Interest revenue (3945-2959) 986
Note receivable 240000

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In: AccountingOn November 16, Jackson Lawless, Inc. made a cash loanto a customer andreceived a...On November 16, Jackson Lawless, Inc. made a cash loanto a customer andreceived a $ 240,000 a 60 day10% note. What is the maturity date and the            maturity value of the note?            Give the necessary adjusting entry on December 31:           Give the journal entry for the maturity date for Jackson Lawless,Inc.

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