Question

accepted a $9,500, 45-day, 8% note in granting miranda lee a time extension on her past-due account receivable. december 31prepared an adjusting entry to record the accrued interest on the lee note.

Answer 1

The amount of interest due for the 45-day period is $136.30

Debit Interest Receivable(DR) is 136.30

Credit Interest Revenue(CR) is 136.30

Explanation:

Step 1: Calculate the amount of interest due for the 45-day period.

Interest = 9,500 x 8% x $\frac{45}{365}$

= $136.30

Step 2: Make the adjusting entry.

Debit Interest Receivable(DR) is 136.30

Credit Interest Revenue(CR) is 136.30

This entry increases Interest Receivable and records the interest revenue earned on the note.

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