Notes Receivable Calculations
p3. West Palm Company engaged in the following transactions involving promissory notes:
May 3 Sold engines to Mittal Company for $120,000 in exchange for a 90-day, 12 percent promissory note.
16 Sold engines to Tata Company for $64,000 in exchange for a 60-day, 13 percent note.
31 Sold engines to Arsenal Company for $60,000 in exchange for a 90-day, 11 percent note.
(Continued)
ReQUIReD
1. For each of the notes, determine the (a) maturity date, (b) interest on the note, and
(c) maturity value. (Round to the nearest cent.)
2. Assume that the fiscal year for West Palm ends on June 30. How much interest income should be recorded on that date? (Round to the nearest cent.)
3. Accounting ConneCtion ? What are the effects of the transactions in May on cash flows for the year ended June 30?