Question

Jasper makes a $27,000, 90-day, 8.0% 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.)

Answer 1

Dr Cash $25,500

Cr Interest Revenue $500

Cr Notes Receivable $25,000

Step-by-step explanation:

Based on the information we were told Jasper makes the amount of $27,000 which include 90-day and 8.0% cash loan to Clayborn Co, which means that Jasper's Journal entry to record the collection of the note and interest at maturity should be:

Dr Cash $25,500

(25,000+500)

Cr Interest Revenue $500

(25,000*8%*90/360)

Cr Notes Receivable $25,000