On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest are due on March 31, 20X2 (one year later). On March 31, 20X2, Nelson Inc. will record interest revenue of: $2,000. $8,000. $6,000. $0.

On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest are due on March 31, 20X2 (one year later). On March 31, 20X2, Nelson Inc. will record interest revenue of: $2,000. $8,000. $6,000. $0.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 21MC: A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an...

See similar textbooks

Related questions

Q: Jamie, the owner of 'Jamie's Port a Potty' leases 10 used portable bathrooms from Royal Restrooms.…

A: Variable Expense: It refers to an expense that changes or varies with a change in the production…

Q: Required: 1. Using the indirect method, compute the net cash provided by/used in operating…

A: Statement of cash flows forms a part of financial statement of the entity and is prepared with a…

Q: Logan Products has two production departments-assembly and finishing. These are supported by two…

A: Cost allocation is used in analyzing or identifying the process to assign the cost to people, and…

Q: On April 1, 2024, Titan Ca classifies the equipment

A: Straight line depreciation is the standard method for recognizing the carrying amount of a fixed…

Q: What percentage of her rent may Arlene deduct as a business-use-of-home expense? 006

A: Business-use-of-home expenses are the portion of household expenses that taxpayers can deduct when…

Q: A tile manufacturer has supplied the following data: Boxes of tiles produced and sold Sales revenue…

A: Net operating income refers to the measurement of the profit earned from the business by subtracting…

Q: Chelsea Clinic projected the following budget information for 2020: Total FFS Visit Volume 90,000…

A: A budget is a financial plan prepared by the organization as a projection of future income and…

Q: Hogg Company purchased a machine from Chump Corporation on October 31, 2020. In payment for the…

A: The promissory note is a written promise made by the borrower to repay the debts on a specific date…

Q: Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have…

A: Using activity-based costing, the overhead is applied using different activity rates. The activity…

Q: Pharoah Company has gathered the following information. All materials are added at the beginning of…

A: EQUIVALENT UNITS OF PRODUCTION Equivalent Production is represents the production of a process in…

Q: The following account balances are available from the ledger of Yutao Shui Corporation on December…

A: Financial reorganization involves restructuring a company's financial framework to address issues…

Q: Sheridan Department Store uses a perpetual inventory system. Data for product E2-D2 include the…

A: The objective of the question is to prepare a perpetual inventory schedule for the transactions of…

Q: Required information [The following information applies to the questions displayed below.] The…

A: The cost of goods sold is calculated as opening finished goods inventory add cost of goods…

Q: Suppose your expenses for this term are as follows: tuition: $12,000, room and board: $6,500, books…

A: Opportunity cost is the value that a company, investor, or individual customer loses out on when…

Q: Learning Curve Sharon Glessing, controller for Janson Company, has noticed that the company faces a…

A: Direct costs are the expenses that are directly used for the production of goods and services for…

Q: Wallace, Inc., prepared the following budgeted data based on a sales forecast of $6,000,000: Direct…

A: Break even means where there is no profit no loss. Break even point means where the total cost and…

Q: In July, Carrie's Rock Walls Inc. completed several projects, one of which was a rock wall for city…

A: It is the process of making decisions that involve the management of costs in order to achieve…

Q: When would a sole proprietorship use IFRS? Select one: a. If it ho plans to become public in the…

A: A sole proprietorship would typically use IFRS (International Financial Reporting Standards) if…

Q: The Cullumber Company issued $240,000 of 13% bonds on January 1, 2025. The bonds are due January 1,…

A: The bonds are issued to raise the money from the market or investors. The bonds are issued at a…

Q: The two types of sampling risks that auditors face include the risk of incorrect acceptance and the…

A: The objective of the question is to understand the two types of sampling risks that auditors face,…

Q: e balance sheet of Adel, Basel, and Yousef partnership on January 1, 2021 (the date of artnership…

A: Partnership means where two or more person comes together to form the business and share profit and…

Q: Olly Company is a merchandising business that sells dog food. Based on the following information,…

A: Income statement is a financial statement that shows the profitability, total revenue and total…

Q: Terry's Markets has sales of $684,000, costs of $437,000, interest paid of $13,800, total assets of…

A: Return on equity refers to the return that is being earned by the investors over the investment that…

Q: Which of the following statements are correct? Fund accounting segregates financial resources with…

A: Fund Accounting: Fund accounting is an accounting method that non-profit organizations use to…

Q: Karl Industries purchased a machine from Koffee Corporation on October 1, 2020 gamma In payment for…

A: An equated monthly installment is a fixed payment amount made by a borrower to a lender at a…

Q: Selected financial data regarding current assets and current liabilities for Queen's Line, a…

A: Current ratio is the ratio between total current assets to total current liabilities. It is…

Q: ecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los…

A: First stage allocation is the allocation of overhead costs to different activity cost pools. It is…

Q: The tax court is hearing a case for a taxpayer living in Pennsylvania. The 1st and 3rd Circuit…

A: The U.S. Tax Court is not bound by the decisions of the Circuit Courts of Appeals, However, the…

Q: Question 1 Which of the following descriptions is not true of state university systems? O State…

A: A. State universities can create non-profit organizations to solicit endowments, hold investments,…

Q: AreaBurt purchased an apartment building on January 1, 2010, for $345,000. The building has been…

A: As per section 1231 gain will be = $420,000 - $345,000…

Q: A corporation has $1,730,000 to distribute in dividends and did not distribute dividends the…

A: A dividend is a kind of gift that a business delivers to its shareholders, whether it be cash or…

Q: Monty Manufacturing builds playground equipment that it sells to elementary schools and…

A: Fixed manufacturing overhead volume variance = Budgeted fixed overhead cost - Standard fixed…

Q: A-1

A: Over time, wear and use, damage, and obsolescence cause an asset's value to decrease. The unit of…

Q: Use the following information for the Exercises below. (Static) [The following information applies…

A: Finished product means the product ready to be sold out. Raw material means the material used to…

Q: Problem 9-18 A firm with sales of $17,000,000 has inventory of $800,000. The firm has no cash sales…

A: The operating cycle is the formula that helps the business entity by determining average days…

Q: In the province of Ontario and for HST/GST purposes, if you sell exempt rated services, you cannot…

A: Exempt-rated supplies do not attract HST; Where as Zero-rated supplies, on the other hand, are…

Q: Darin Development Company engaged in the following transactions during the current year. (Click the…

A: The objective of the question is to identify and classify the noncash assets and liabilities…

Q: Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard…

A: The overhead rates are to be defined using labor hours as well machine hours.Overheads are the…

Q: Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and…

A: Lets understand the basics.In high low method, total costs are separated into fixed costs and…

Q: [The following information applies to the questions displayed below.] Delicious Dave's Maple Syrup,…

A: Corporation -A business organization that is a separate legal entity—that is, an identity apart…

Q: On January 1, Year 5, AB Company (AB) purchased 80% of the outstanding common shares of Dandy…

A: Consolidation is an activity in which financial statements of a parent and its subsidiary should be…

Q: Nancy contributed $50,000 of cash and land with a fair market value of $100,000 and an adjusted…

A: Tax basis is the monetary value of an asset that is used for tax purposes. It serves as a reference…

Q: At the beginning of 2022, Robotics Incorporated acquired a manufacturing facility for $12.6 million.…

A: Introduction:Depreciation is the non-cash expense that is charged on the non-current or long-term…

Q: Sky Company employed Tom Mills in Year 1. Tom earned $5,700 per month and worked the entire year.…

A: Payroll Tax: Payroll taxes comprise the taxes paid by employers and employees on salaries,…

Q: Suki Company uses activity-based costing to and applies overhead using predetermined overhead rates…

A: Manufacturing Overhead cost is an indirect cost incurred in the production of goods, where indirect…

Q: Bravo Company sells two products, green camouflage pants and orange camouflage pants. Bravo predicts…

A: Contribution Margin:We get the contribution margin when we deduct the total variable expenses from…

Q: 8. Admission of New Partner - A equity = 60,000 -B equity = 40,000 share profits and losses in a…

A: The partnership comes into existence when two or more persons agree to do the business and share…

Q: Pro-Weave manufactures stadium blankets by passing the products through a weaving department and…

A: Process costing is used in the manufacturing of products that are required to undergo more than one…

Q: By the end of December, Green Company has completed work, earning $4,500. Green company has neither…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based…

A: Since you have posted a question with multiple sub-parts, we will do the first three sub-parts for…

Question

On April 1, 20X1, Nelsen Inc. accepts a $100,000, 8% note. The note receivable and interest are due on March 31, 20X2 (one year later). On March 31, 20X2, Nelson Inc. will record interest revenue of:

$2,000.

$8,000.

$6,000.

$0.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Note Receivable

VIEW

Step 2: Calculation of the interest revenue to be recorded, as follows:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
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? A. $7,150 B. $65,000 C. $14,300 D. $2,383
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
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? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
TORR, Inc. issues a $600,000, 9%, five-year note payable on January 1, 20X1. If the monthly payment is $12,455, what is the note's carrying value after the first month's payment is made on January 31, 20X1? Select one: a. $600,000 b. $592,045 c. $593,540 d. $595,500 e. $587,545
On June 8, Williams Company issued an $75,972, 6%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? When Ⓒ required, round your answer to the nearest dollar. O a. $75,972 Ob. $77,491 Oc. $80,530 Od. $4,558 Next
On January 1, 2021, Nees Manufacturing lends $10,000 to Roberson Supply using a 9% note due in eight months. Calculate the amount of interest revenue Nees will record on September 1, 2021, the date that the note is due. a. $300.b. $600.c. $900.d. $1,000.