The amount of cash collected at maturity on a $4,000 note is $4,200. If $120 of the interest has been accrued prior to maturity, the entry to record the honouring of the note at maturity should include a credit to Interest Revenue for $80.

Question

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The total interest on the note is $200 ($4,200 - $4,000). Since $120 has already been accrued, the remaining interest to be recognized at maturity is $80, which should be credited to Interest Revenue.

The Amount of Cash Collected at Maturity on a $4,000