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Notes Receivable

Notes Receivable - NotesReceivable .Asimplepromissory note...

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Notes Receivable Companies classify the promissory notes they hold as notes receivable. A simple promissory  note: The face value of a note is called the  principal , which equals the initial amount of credit  provided. The  maker  of a note is the party who receives the credit and promises to pay the  note's holder. The maker classifies the note as a note payable. The  payee  is the party that  holds the note and receives payment from the maker when the note is due. The payee classifies  the note as a note receivable. Calculating interest . Notes generally specify an interest rate, which is used to determine how  much interest the maker of the note must pay in addition to the principal. Interest on short-term  notes is calculated according to the following formula:
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For example, interest on a four-month, 9%, $1,000 note equals $30. When a note's due date is expressed in days, the specified number of days is divided by 360 or 
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Notes Receivable - NotesReceivable .Asimplepromissory note...

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