Compute the maturity date of and interest on notes
For a note stated in months, the maturity date
is found by counting the months from the date of issue. For
a note stated in days, the number of days is counted, omit-
ting the issue date and counting the due date. The formula
for computing interest is:Face value
Explain how companies recognize notes receivable.
Describe how companies value notes receivable.
with accounts receivable, companies report notes receivable
at their cash (net) realizable value.The notes receivable al-
The computation and estimations involved in valuing
notes receivable at cash realizable value, and in recording
the proper amount of bad debts expense and related al-
lowance are similar to those for accounts receivable.
Explain the statement presentation and analysis of
SUMMARY OF STUDY OBJECTIVES