Question 1a

The interest on a $70,000, 30-day, 6% note payable is:

	$350
	$74,200

	$70,350
	$4,200

Question 1b

The maturity value of a $40,000, 90-day, 6% note payable is:

	$42,400
	$2,400

	$40,600
	$600

Question 1c

On June 8, Acme Co. issued an $80,000, 6%, 120-day note payable to Still Co. Assume that the fiscal year of Acme Co. ends June 30. What is the amount of interest expense recognized by Acme in the following (second) year?

	$1,306.67
	$1,200.00

	$1,600.00
	$1,208.89

Question 1d

The journal entry a company uses to record the issuance of a note for the purpose of borrowing funds for the business is:

	debit Cash; credit Notes Payable
	debit Accounts Payable; credit Notes Payable

	debit Cash and Interest Expense; credit Notes Payable
	debit Notes Payable; credit Cash

Question 1e

The journal entry a company uses to record the payment of a discounted note is:

	debit Notes Payable; credit Cash
	debit Notes Payable and Interest Expense; credit Cash

	debit Accounts Payable; credit Cash
	debit Cash; credit Notes Payable