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17 December, 08:01

At December 31 of the current year, Cart Company has a $16,000 Notes Receivable from a customer. Interest of 5% has accrued for 9 months on the note. What will be reported on the Balance Sheet?

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  1. 17 December, 10:51
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    Answer: $23,200 as total current asset for the period

    Explanation:

    Note Receivable has a value $16,000

    Interest on Note = 5%

    Accrued for 9 months

    Yearly Interest accrued = 16,000*5%*12 = 9,600

    Interest for 9 months = 9600/12*9 = 7,200

    Balance sheet Extract

    Other Income

    Int Accrued on Note Receivable $7,200

    Current Asset

    Note Receivable $16,000

    Int Accrued on Note Receivable $7,200

    Total Current Asset $23,200
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