Homework Answers
Answer:
Correct answer is:
Cash $58,860
Notes receivable $54,000
Interest receivable $2,700
Interest revenue $2,160
Explanation:
9 months Notes receivable of amount $54,000 issued accepted on Aug 1 2022. Interest rate = 12%.
On December 31, 2022, it will record following entry accrue interest of (54000 * 12% * 5/12 =) $2,700:
Interest Receivable $2700
Interest Revenue $2700
On maturity date on receipt of amount plus interest (54000 + 54000 * 12% * 9/12 =) $58,860 it will make following entry:
Cash $58,860
Notes receivable $54,000
Interest receivable $2,700
Interest revenue $2,160
As such option B is correct and other options A, C and D are incorrect.
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Because the note is accepted during the middle of the month,
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April 2021, and...
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