PROBLEM IV Wolfe Company issued a 60day 8 note for 1500000 d

PROBLEM IV Wolfe Company issued a 60-day, 8% note for $15,000.00, dated April 5, to Lamb Company on account. (a) Determine the due date of the note. (b) Determine the maturity value of the note. (9) Journalize the entries to record the following: 1. Receipt of the note by the payee, and 2. Receipt by the payee of the amount due on the note at maturity.

Solution

60 days from April 5th is June 4th.

Interest for 60 days is = 10000 * 8% * 60/360 = 133.33

Entries:

Date	Account	Debit	Credit
April.5	Cash	$ 10,000.00
	Note payable		$ 10,000.00
	[Being note signed for $10,000 at 8% for 60 days]
June.4	Note payable	$ 10,000.00
	Interest expense	$       133.33
	Cash		$ 10,133.33
	[Note payable paid on due date along with interest for the period]