Question

On March​1, KlausCorporation accepted a 60​-day, 3​%, $ 29 comma 200note receivable from J. Stonein exchange for his account receivable.

Whats the interest recievable and revenue? How do I calculate it?

Answer 1

Following entry will be passed when note is received for accounts receivables

General Journal	Debit	Credit
Notes receivable	$ 29,200.00
Accounts Receivables		$     29,200.00
(Note accepted for receivables balance)

Interest Revenue

Amount	$ 29,200.00
Annual interest rate	3%
Annual interest (365 days)	$        876.00
Interest for 60 days ($ 876/365 x 60)	$        144.00

Interest rate is for 365 days .

You can assume days in year to be 360 then the answer would be little different.