Assume That Part of Accounts and Other Receivables on Thompson

question 103

Essay

Assume that part of accounts and other receivables on Thompson Toys' February 2,2010,balance sheet is comprised of $43,225,000 of notes receivable.Two notes make up the amount.The first note has a face value of $30,000,000 and bears interest at 7 percent for 90 days.The second note has a face value of $13,225,000 and bears interest at 9 percent for 120 days.Record the journal entry for the collection of the 7 percent note on May 3 and the dishonor of the 9 percent note on June 2.(Omit explanations; assume no interest had been accrued.)Round amounts to nearest dollar.

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Definitions:

Indifference Curve

A graph showing different combinations of two goods that give the consumer equal satisfaction and utility.

Marginal Rate

Marginal rate commonly refers to the change in one variable relative to a unit change in another, such as in taxation or interest.

Substitution

The economic principle stating that as prices rise or consumer preferences change, individuals substitute one good or service for another.

Utility Function

A mathematical representation of how different combinations of goods or services generate levels of happiness or satisfaction to the consumer.