Answer:
Nov 1 Notes Receivable-C Bohr 66000 Dr
Cash 66000 Cr
Dec 11 Notes Receivable-KR Pine 5400 Dr
Sales Revenue 5400 Cr
Dec 16 Notes Receivable-A Murdock 7200 Dr
Accounts Receivable 7200 Cr
Dec 31 Interest receivable 598 Dr
Interest Revenue 598 Cr
Explanation:
We need to calculate the interest accrued on all the notes. We will then add the interests on these notes and credit interest revenue by that amount and debit interest receivable.
<u />
<u>Interest revenue on Note 1</u>
Interest Revenue = 66000 * 0.05 * 2/12 = $550
<u />
<u>Interest revenue on Note 2</u>
Number of days interest is accrued for is 20 days (31-11=20)
Assuming a 360 day year.
Interest revenue = 5400 * 0.07 * 20/360 = $21
<u />
<u>Interest revenue on Note 3</u>
No of days interest is accrued for is 15 (31-16 = 15)
Assuming a 360 day year.
Interest revenue = 7200 * 0.09 * 15/360 = $27
Total Interest revenue = 550 + 21 + 27 = $598