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    Villaruz Shereen Mae
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    Notes receivable are formal promises to pay supported by notes. They represent claims from the sale of goods or services. Notes are initially measured at present or face value, and subsequently at amortized cost using the effective interest method. Dishonored notes that are past due are removed from notes receivable and transferred to accounts receivable at the face value plus any interest or charges.

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    4. Notes Receivable.pdf

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    Notes receivable are formal promises to pay supported by notes. They represent claims from the sale of goods or services. Notes are initially measured at present or face value, and subsequently at amortized cost using the effective interest method. Dishonored notes that are past due are removed from notes receivable and transferred to accounts receivable at the face value plus any interest or charges.

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    290 views1 page

    Notes Receivable PDF

    Uploaded by

    Villaruz Shereen Mae
    Notes receivable are formal promises to pay supported by notes. They represent claims from the sale of goods or services. Notes are initially measured at present or face value, and subsequently at amortized cost using the effective interest method. Dishonored notes that are past due are removed from notes receivable and transferred to accounts receivable at the face value plus any interest or charges.

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    © All Rights Reserved
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    of 1

    CHAPTER

    BLUE NOTES
    4 S
    L
    Notes Receivable are claims supported by formal promise to pay in the form of notes.
    Note: Standing alone, notes receivable represents only claims arising from sale of merchandise or service in the ordinary course of
    business.

    Measurement
    INITIAL SUBSEQUENT
    Present Value

    Short Term NR PV = Face Value Face Value


    Long Term NR: Amortized Cost
    Interest Bearing PV = Face Value AC = FV
    (PV upon issuance)
    Non-interest Bearing AC = PV + amortization of discount
    PV = Discounted Value of future
    or
    cash flows using the effective
    interest rate AC = FV - unamortized unearned
    interest income

    Dishonored Notes are matured and unpaid notes.

    Treatment of Dishonored Notes


    Dishonored noted shall be removed from the notes receivable account and transferred to accounts receivable at
    an amount to include, if any interest and other charges.

    Theory of Accounts Practical Accounting 1

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