Question

On Jan 8,2018 Jeffrey purchased a $10,000 Treasury bill with a 13 week maturity for $9,765....

On Jan 8,2018 Jeffrey purchased a $10,000 Treasury bill with a 13 week maturity for $9,765. When the bill matured, he received $10,000 . Jeffrey’s $235 in interest is reported as ?

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Answer #1

T - bill is purchased in the year 2018 and it for 13 weeks only. Hence matured in the same accounting year.

So, all the interest = 235 shall be reported as interest revenue for 2018 itself.

.................................................................Debit..........Credit

Cash........................................................10,000

Investment in T-Bills ...............................................9765

Interest revenue .......................................................235

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