A Business Issued a 120-Day, 6% Note for $10,000 to a Creditor

question 33

Essay

A business issued a 120-day, 6% note for $10,000 to a creditor on account. The company uses a 360-day year for interest calculations. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest.

---

Definitions:

Blind Obedience

The act of following orders or instructions without questioning them or considering their implications, often because of perceived authority of the issuer.

Corporate Social Responsibility

A business model that helps a company to be socially accountable—to itself, its stakeholders, and the public. By practicing corporate social responsibility, companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.

Business Affairs

Involves the management of important aspects of a business such as planning, organizing, and controlling financial activities.

Levels of Responsibility

The hierarchical arrangement of duties and accountability in an organization or job, determining how decisions and tasks are delegated and managed.