Question

Pharoah Co. has the following notes receivable outstanding at December 31, 2021:

Issue Date		Term		Principal			Interest Rate
1. August 31, 2021		5 months		$19,200			3%
2. February 1, 2021		12 months		33,600			3%
3. October 31, 2021		6 months		10,800			4%

Interest on each of the above notes is payable at maturity.

Calculate the interest revenue that Pharoah Co. will report on its income statement for the year ended December 31, 2021. Indicate where this will be presented on a multiple-step income statement. (Round answer to 0 decimal places, e.g. 5,275.)

Total interest revenue

$

Interest Revenue is reported under _______________________ on the income statement.

  

  

Calculate the amounts related to these notes that will be reported on Pharoah Co.’s balance sheet at December 31, 2021. Indicate where they will be presented. (Round answers to 0 decimal places, e.g. 5,275.)

Account		Presented in Balance sheet under		Amount
				$

				$

Answer 1

Req 1.
Note no.	Date	Amount	Rate	Period expired onn Dec31	Interest receivable
1	31-Aug	19200	3%	4		192
2	01-Feb	33600	3%	11		924
3	31-Oct	10800	4%	2		72
				Total Interest revenue	1188
Total Interest revenue $ 1188
Interest revenue is reported Under Revenue head in Income Statement
Balance Sheet(Extract)
Assets:
Current assets
Notes receivable (19200+33600+10800)	63600
Interest receivable			1188
Total current assets			64788