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 $8,800 face value and 6% interest. On October 30, the journal entry to record the collection of the note, assuming a 360-day year, should include a
a. debit to Interest Receivable for $150b. debit to Notes Receivable for $10,000c. credit to Notes Receivable for $10,150d. credit to Interest Revenue for $150

Answer 1

Answer:

credit to interest revenue for $132

Explanation:

given data

face value = $8,800

interest rate = 6 %

time = 90 days

solution

if we see here journal entry that is

date                  particular                                   debit                      credit

October 30       cash A/C                                   $8932

                          to notes payable                                                    $8800

                          to interest revenue                                                $132

                          ( $8800× 6% × $\frac{90}{360}$ )

so here credit to interest revenue for $132