Question

What entry does whispering winds corp. make at the maturity date, assuming gates pays the note and interest in full at that time?

Answer 1

Since the interest payable, principal and the maturity date was not given in this problem. I can only give you the account titles used and their respective debit and credit side. But to know the interest owed, used the formula I = Prt.

So when Whispering Winds Corporation receives the principal and the interest payment, the entry would be:

Debit Cash xx

Credit Notes Receivable xx

Credit Interest Income xx