Respuesta :
Interest accrued on the note receivable on December 31, 2018, is $ 400.
Interest = (Principal × Rate × Number of months )/(100 ×12)
= (8,000 × 5 × 6 )/(100× 12)
= (240,000 )/( 1200)
= $ 200 (Interest for 1 month)
So, Interest for 2 months (from November 1 to December 31)
= $ 200 ×2
= $ 400 (Answer)
1. Accounts receivable are credited and notes receivable are debited when notes receivable are extended for payment.
2. On December 31st, $400 is deducted from interest Receivable and credited to interest Income for accrued interest.
3. Accrued interest must be recorded in accrual accounting.
Interest is the fee you pay to borrow money or the fee you charge to lend money. Interest is often expressed as an annual percentage of the borrowed amount. This percentage represents the loan's interest rate.
Interest is the amount paid over and above the original amount to a lender or depositor by a borrower or deposit-taking financial institution at a predetermined rate in the domains of finance and economics (the amount borrowed). It differs from any fees the borrower may be required to pay to the lender or another party.
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