Question

Abraham Motor Company performed the following transactions involving promissory notes:
Mar. 3 Sold machines to Anton Company for $60,000 in exchange for a 90-day, 10 percent promissory note.
16 Sold machines to Yu Company for $32,000 in exchange for a 60-day, 11 percent note.
31 Sold machines to Yu Company for $30,000 in exchange for a 90-day, 9 percent note.

REQUIRED
1. For each of the notes, determine the maturity date, interest on the note, and maturity value.
2. Assume that the fiscal year for Abraham Motor ends on April 30. How much interest income should be recorded on that date?
3. What are the effects of the transactions in March on cash flows for the year ended April 30?



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  • CreatedSeptember 10, 2014
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