Answer:
Nov 1 Notes Receivable-C Bohr 66000 Dr
Cash 66000 Cr
Dec 11 Notes Receivable-KR Pine 5400 Dr
Sales Revenue 5400 Cr
Dec 16 Notes Receivable-A Murdock 7200 Dr
Accounts Receivable 7200 Cr
Dec 31 Interest receivable 598 Dr
Interest Revenue 598 Cr
Explanation:
We need to calculate the interest accrued on all the notes. We will then add the interests on these notes and credit interest revenue by that amount and debit interest receivable.
Interest revenue on Note 1
Interest Revenue = 66000 * 0.05 * 2/12 = $550
Interest revenue on Note 2
Number of days interest is accrued for is 20 days (31-11=20)
Assuming a 360 day year.
Interest revenue = 5400 * 0.07 * 20/360 = $21
Interest revenue on Note 3
No of days interest is accrued for is 15 (31-16 = 15)
Assuming a 360 day year.
Interest revenue = 7200 * 0.09 * 15/360 = $27
Total Interest revenue = 550 + 21 + 27 = $598