On 1 October 2016,Ealys Jewellers accepted a 4-month,10% bill for $8000 in settlement of an overdue account receivable.The company closes its accounts at the year-end.Calculate and record the accrued interest on the bill at 31 December 2016.

Question

Quizplus · Accepted Answer

The interest for 3 months (October to December) is calculated as $8000 * 10% * (3/12) = $200.

On 1 October 2016,Ealys Jewellers Accepted a 4-Month,10% Bill for $8000