Question

Jasper makes a $33,000, 90-day, 7.5% cash loan to Clayborn Co. Jasper's entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)

Multiple Choice

• Debit Cash $35,475; credit Interest Revenue $2,475, credit Notes Receivable $33,000.

• Debit Notes Payable $33,000; Debit Interest Expense $2,475; credit Cash $35,475.

• Debit Cash for $33,000; credit Notes Receivable $33,000.

• Debit Cash $33,618.75; credit Notes Receivable for $33,618.75.

• Debit Cash $33,618.75; credit Interest Revenue $618.75; credit Notes Receivable $33,000.

Answer 1

	Principal Amount of Notes Receivable		$ 33,000.00
	Interest for 360 days		$   2,475.00
	Interest for 90 days		$     618.75
	So amount received will be		$ 33,618.75
	Entry will be as follows
Date	Account Ledger		Debit	Credit
	Cash		$ 33,618.75
	Notes Receivable			$ 33,000.00
	Interest Revenue			$     618.75
	( Notes Receivable received and 90- days interest Received)