Lo 96 which of the following is true of a maturity

19. LO 9.6 Which of the following is true of a maturity date?
A. It must be calculated in days, not in months or years.
B. It is the date when principal and interest on a note are to be repaid to the lender.
C. It is the date of establishment of note terms between a lender and customer.
D. It is not a characteristic of a note receivable.
Solution
B
20. LO 9.6 Mark Industries issues a note in the amount of $45,000 on August 1, 2018 in
exchange for the sale of merchandise. Which of the following is the correct journal entry for this
sale?
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OpenStax Principles of Accounting, Volume 1: Financial Accounting
Chapter 9: Accounting for Receivables
21. LO 9.6 A customer takes out a loan of $130,000 on January 1, with a maturity date of 36
months, and an annual interest rate of 11%. If 6 months have passed since note establishment,
what would be the recorded interest figure at that time?
22. LO 9.6 A company collects an honored note with a maturity date of 24 months from
establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are
used to record collection of the honored note at maturity date?
23. LO 9.6 Orion Rentals is unable to collect on a note worth $25,000 and has accumulated
interest of $250. It convert this note and interest to accounts receivable. After some time, Orion
is still unable to collect the debt and it decides to sell the converted note to a collection agency.
The collection agency will pay only 20% of the value of accounts receivable to Orion. What is
the amount of cash paid to Orion from the collection agency?
A. $5,000
B. $5,050
C. $20,000
D. $19,950
B. ($25,000 + $250) × 20%
Solution
Questions
1. LO 9.1 What is the matching principle?