On October 1, Black Company receives a 6% interest bearing note from Reese Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of

Question

Quizplus · Accepted Answer

Interest revenue is calculated for three months (October to December) on a $20,000 note at a 6% annual rate: $20,000 * 6% * (3/12) = $300.

On October 1, Black Company Receives a 6% Interest Bearing