Your friend needs to buy a $ 1,000 component to replace some essential sound equipment. He has neither that much cash nor credit available. He has heard of promissory notes and asks for your help. Explain the concept of a promissory note. Also explain what it will mean when your friend signs the note and why the total of the payments on the note at maturity will be greater than the original $ 1,000.
Answer to relevant QuestionsYour supervisor has asked you to audit some journal entries recorded by her client’s bookkeeper on the following page. Review the following transactions. If there is an error, rejournalize the entry. If the bookkeeper’s ...From the point of view of a creditor, what are the advantages of having a note receivable over having an account receivable? On May 10, Morris Company received a 90-day, 6.5 percent note for $ 7,500, dated May 10, for merchandise sold to Baar Company. Morris Company endorsed the note in favor of its bank on May 28. The bank discounted the note at ...Selected transactions of Larry's Center carried out this year are as follows: Jan. 10 Sold merchandise on account to Oscar Stores; 3/10, n/30; $ 5,692. Feb. 9 Received a 30-day, 5.75 percent note, dated February 9, for $ ...You loaned $ 25,000 to a close friend to buy an off-road vehicle. You planned to have him sign a note receivable, with the off-road vehicle becoming collateral, or security, for the note in case your friend failed to pay ...
Post your question