Question

Journalize the entry to record the receipt of payment of the note at maturity.

Cash 60,900
Notes Receivable 60,000
Interest Revenue 3,600

Answer 1

Journal entry:

Debit Cash Account $63,600

Credit Notes Receivable $60,000

Credit Interest Revenue $3,600

To record the settlement of notes receivable and interest.

Step-by-step explanation:

On maturity of the note, the customer is expected to settle account by paying for both the Notes and the Interest Due. The customer will pay $63,600 to settle the two accounts. Cash balance will increase to $124,800 from $60,900 by this transaction.