Question

Hampton Importing Company engaged in the following transactions involving promissory notes:
May 3 Sold engines to Belca Company for $15,000 in exchange for a 90-day, 12 percent promissory note.
16 Sold engines to Weiss Company for $8,000 in exchange for a 60-day, 13 percent note.
31 Sold engines to Weiss Company for $7,500 in exchange for a 90-day, 11 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 Hampton Importing ends on June 30. How much interest income should be recorded on that date?
3. What are the effects of the transactions in May on cash flows for the year ended June 30?



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  • CreatedSeptember 10, 2014
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