A company is holding a $6,000, 90-day, 6% note receivable, dated December 1. The entry to record accrued interest at the end of its fiscal year on December 31 will include:

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The interest for 30 days (December 1 to December 31) on a $6,000 note at 6% annual interest is calculated as follows: Interest = Principal × Rate × Time = $6,000 × 6% × (30/365) = $29.59, which rounds to $30. This amount represents the interest accrued at year-end and is recorded as an increase to Interest Receivable.

A Company Is Holding a $6,000, 90-Day, 6% Note Receivable