Question

A 60-day, 9% note for $10,000, dated may 1, is received from a customer on account. the maturity value of the note is

Answer 1

Given:
60-day, 9% note for 10,000

The maturity value is: 10,150

10,000 x 9% x 60/360 = 150 interest
10,000 + 150 = 10,150

The 9% is the annual interest on the note.
60-day is the term of the note. 
The note will mature at the end of July or on August 1st.

Answer 2

Answer:

Maturity value of note is $10,150.

Explanation:

9% note worth $10,000 with maturity period of 60 days is received from a customer. Value of note received at its maturity is principal amount of $10,000 plus interest amount. Interest amount is calculated as shown below:

Interest rate = 9% or 0.09

Principal amount = $10,000

Time period = 60/360

$Interest\ amount=Principal\ amount\times interest\ rate\times time\ period$  

$Interest\ amount= 10,000\times 0.09\times\frac{60}{360}$  

= $150

Total value of note at maturity is = Principal amount + interest

         = $10,000 + $150

         = $10,150

Further explanation:

Notes receivable is a promissory note that is made by a payee as a promise to pay in future. This includes principal amount and interest. Notes come with an interest rate and maturity date which could be in days or months. Amount is received on the maturity date. At the time of receipt of notes receivable, the company debits notes receivable at face value.

An example of notes receivable is 30 days 5% notes receivable of $8,000. This means that this note has principal amount of $8,000 with interest of 5% payable after 1 month or 30 days. It is reported in the balance sheet as a current asset if it has a maturity of less than a year.

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Keywords: Notes receivables, interest on note, notes receivable at maturity, promissory note, payee.