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Lady bird [3.3K]
3 years ago
13

Uniform Supply accepted a $4,800, 90-day, 10% note from Tracy Janitorial on October 17. What entry should Uniform Supply make on

December 31, to record the accrued interest on the note
Business
1 answer:
kolbaska11 [484]3 years ago
3 0

Answer:

The answer is

Dr: Notes Receivable $4,800

Dr: Interest Receivable $120

Cr: Sales $4,920

Explanation:

The yearly interest rate is 10%

So the interest rate for 90 days(assume 360 days make a year?

90/360 x 10%

2.5% is the interest rate for 90 days.

The interest payment for 90 days will be;

2.5% x $4,800

= $120

The entry will now be:

Dr: Notes Receivable $4,800

Dr: Interest Receivable $120

Cr: Sales $4,920

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