Illustration 8 11 chapter 8 23 so 4 compute the

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Unformatted text preview: receivable. To the Maker, the promissory note is a note payable. Illustration 8-9 Chapter 8-21 Notes Receivable Notes Receivable Determining the Maturity Date Note expressed in terms of Months Days Computing Interest Chapter 8-22 Illustration 8-10 SO 4 Compute the interest on notes receivable. Notes Receivable Notes Receivable Computing Interest When counting days, omit the date the note is issued, but include the due date. Illustration 8-11 Chapter 8-23 SO 4 Compute the interest on notes receivable. Notes Receivable Notes Receivable Recognizing Notes Receivable Illustration: Assuming that Brent Company wrote a $1,000, two­ month, 8% promissory note dated May 1, to settle an open account. Prepare entry would Wilma Company makes for the receipt of the note. May 1 Chapter 8-24 Notes receivable Accounts receivable 1,000 1,000 SO 4 Compute the interest on notes receivable. Notes Receivable Notes Receivable Valuing Notes Receivable Like accounts receivable, companies report short­term notes receivable at their cash (net) realizable value. Estimation of cash realizable value and bad debts expense are done similarly to accounts receivable. Allowance for Doubtful Accounts is used. Chapter 8-25 SO 4 Compute the interest on notes receivable. Notes Receivable Notes Receivable Disposing of Notes Receivable 1. Notes may be held to their maturity date. 2. Maker may default and payee must make an adjustment to the account. 3. Holder speeds up conversion to cash by selling the note receivable. Chapter 8-26 SO 5 Describe the entri...
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