COMMERCE 1AA3 Chapter 4: Chapter-4
11 Feb 2019
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Creditor: the party to whom money is owed. The debit is a note receivable from the borrower. Debtor: the party that borrowed and owes money on the note. The debtor is a note receivable from the borrower. The interest is stated as an annual percentage rate. Maturity date: the date on which the debtor must pay the note. Principal: the amount of money borrowed by the debtor. Term: the length of time the debtor has to repay the note. Six month note runs from july 1st to december 31st. Interest is revenue to the creditor and an expense to the debtor. Example: assume canadian western bank has an october 31 year-end. The bank earn interest revenue during july, august, september, and october. At october 31, 2017, the bank accrues interest revenue for four months as follows. The bank assets increases and the revenue increases. Example: the bank collects the note on december 31st, 2017.
