Question

Duerr Company makes a $69,000, 30-day, 10% cash loan to Ryan Company. The note and interest to be collected at maturity is: (Use 360 days a year.)

Answer 1

the journal entry to record the loan:

E.g. January 1, 202x, loan made to Ryan Company

Dr Notes receivable 69,000

Cr Cash 69,000

the journal entry to record the collection of the note:

E.g. January 31, 202x, note collected from Ryan Company

Dr Cash 69,575

Cr Notes receivable 69,000

Cr interest revenue 575

interest revenue = $69,000 x 10% x 30/360 = $575