Answer:
hello your question is incomplete here is the complete question
On February 1, 2018, Sanger Corp. lends cash and accepts a $2,000 note receivable that offers 10% interest and is due in six months. What would Sanger record on August 1, 2018, when the borrower pays Sanger the correct amount owed
A. Cash 2,000
Interest Revenue 100
Notes Receivable 2,100
B. Cash 2,100
Notes Receivable 2,100
C. Cash 2,100
Interest Revenue 100
Notes Receivable 2,000
D. Cash 2,200
Notes Receivable 2,200
Answer : option c is the correct answer : cash = 2100, interest revenue = 100, notes receivable = 2000
Explanation:
The notes receivable accepted by Sanger corp from the Borrower = $2000
at an annual interest rate of : 10%
therefore the interest to be paid on the loan of $2000 per annum will be = 10% of $2000 = $200
since the loan duration is 6 months hence the interest revenue generated from the loan would be = $200 / 2 = $100
The cash to be recorded after the borrower has paid the correct amount owed would be = notes receivables + interest revenue
= $2000 + $100 = $2100
therefore option C is the most accurate record
