Question

On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were $10,000 face value and 6% interest. On October 30, the journal entry to record the collection of the note should include a ____.

Answer 1

Answer:

The journal entry would be:

Explanation:

Note: Options are missing so providing the journal entry.

The journal entry would be for recording the collection of the note is:

October 30

Cash A/c.........................Dr      $10,150

    Interest Revenue A/c.........Cr     $150

    Notes Receivable A/c.........Cr    $10,000

On October 30, the amount is collected so the any increase in cash is debited. Therefore, cash account is debited. And it is collected against a  notes Receivable  of $10,000 so it leads to decrease in liability, it is credited. Therefore, the notes receivable is credited. And the interest revenue is credited.