Question

Record the interest of $370 on a note receivable that was earned at year-end, although collection of the interest is not due until the following year.

Answer 1

To record the interest earned on a note receivable that is not due until the following year, you would debit the Interest Receivable account and credit the Interest Revenue account for the amount earned, which in this case is $370.

Step-by-step explanation:

Interest on a note receivable is recorded as revenue even if it is not due until the following year. In this case, the interest earned is $370. To record this, you would debit the Interest Receivable account for $370 and credit the Interest Revenue account for $370.