Question

On January 1, JC Co. accepted a 60-day, 6%, note in the amount of $10,000 from a customer. On March 2, the due date of the note, the customer honors the note and pays in full. The journal entry that JC would make to record the receipt of payment of this note would include a debit to:

Answer 1

Answer:

Cash account for $10,100

Explanation:

The journal entry is shown below:

Cash Dr $10,100

    To Note receivable $10,000

    To Interest revenue $100

(Being the receipt of the payment is recorded)

The computation of the interest revenue is

= $10,000 × 6% × 60 days ÷ 360 days

= $100

For recording this entry we debited the cash account and credited the note receivable and the interest revenue account

We assume the 360 days in a year