Question

On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were $9,000 face value and 7% interest. On October 30, the journal entry to record the collection of the note should include a a.Interest Revenue for $358. b.Credit to Interest Revenue for $158. c.Notes Receivable for $258. d.Interest Receivable for $58.

Answer 1

b.Credit to Interest Revenue for $158.

Step-by-step explanation:

the journal entry to record the acceptance of the note receivable:

August 1, note receivable accepted from Hsu Company

Dr Notes receivable 9,000

Cr Service revenue 9,000

the journal entry to record the collection of cash:

October 30, cash collected from Hsu Company

Dr Cash 9,158

Cr Notes receivable 9,000

Cr Interest revenue 158