A note that is not paid when due is called a(n)

If unearned revenue is first recorded as a liability, no adjusting or reversing entry is required.

Interest rates on notes receivable are generally stated in terms of days, since most notes receivable are for 90 days or less.

A company may issue notes receivable to employees (FYI-p. 292).

When unearned revenue is recorded, the amount to be received in the future is not yet known.

By transferring the maturity value of a dishonored note from a customer to Accounts Receivable, the business has a complete credit history on the customer's transactions.

When the note receivable from a customer is not paid when it comes due, the business transfers the maturity value of the note to the accounts receivable account.

If a business accepts a large number of notes receivable, it may maintain a separate ledger, similar to the accounts receivable ledger.

If the maturity date of a note is in a fiscal period that is different from the date of the note, an adjusting entry will be needed at the end of the fiscal period.

A common use of a note receivable is when a business borrows money from the bank to pay vendors.

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