RecRoom Equipment Company received an $8,000, six-month, 6 percent note to settle an $8,000 unpaid balance owed by a customer. a. The note is accepted by RecRoom on November 1, causing the company to increase its Notes Receivable and decrease its Accounts Receivable. b. RecRoom adjusts its records for interest its earned to its December 31 year-end. c. RecRoom receives the interest on the note's maturity date. d. RecRoom receives the principal on the note's maturity date.

(a) The required journals are:

Debit Note receivable $8,000

Credit Accounts receivable $8,000

(To record note receivable)

(b) Adjustment for interest its earned to its December 31 year-end:

Debit Interest receivable $80

Credit Interest revenue $80

(To record interest receivable on notes as at 31 Dec)

(c) Receipt of interest on the note at maturity

Debit Cash $240

Credit Interest receivable $240

(Being receipt of interest on note at maturity)

(d) Receipt of principal on the note at maturity

Debit Cash $8,000

Credit Note receivable $8,000

(Being receipt of note principal at maturity)

Explanation:

Note is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.

Interest revenue on the note is calculated as: Principal x Interest Rate x Time

The total interest revenue is $8,000 x 6%/12 x 6 months = $240.

Monthly interest revenue is therefore $240 / 6 months = $40.

Total interest as at December 31 (Nov 1 - Dec 31): $40 x 2 months = $80.

answerplace value;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.