Response to the following questions:
1. For a business, what are the advantages of a note receivable in comparison to an account receivable?
2. Tecan Company issued a note receivable to Bauer Company. (a) Who is the payee? (b) What is the title of the account used by Bauer Company in recording the note?
3. If a note provides for payment of principal of $75,000 and interest at the rate of 8%, will the interest amount to $6,000? Explain.
4. Under what section should accounts receivable be reported on the balance sheet?