Husemann Co.'s assets include notes receivable from customers. During fiscal 2019, the amount of notes receivable averaged $46,400, and the interest rate of the notes averaged 8.9%.

(a) Prepare a journal entry that accrues the interest income earned from the notes.

If the balance in the Interest Receivable account increased by $1,500 from the beginning to the end of the fiscal year, how much interest receivable was collected during the fiscal year?

(b) Prepare a horizontal model to show the collection of this amount. ( + for increase and - for decrease).

(c) Prepare a journal entry to show the collection of this amount.

Question

Business

Jazmyn Larsen

28 October, 04:54

Husemann Co.'s assets include notes receivable from customers. During fiscal 2019, the amount of notes receivable averaged $46,400, and the interest rate of the notes averaged 8.9%.

(a) Prepare a journal entry that accrues the interest income earned from the notes.

If the balance in the Interest Receivable account increased by $1,500 from the beginning to the end of the fiscal year, how much interest receivable was collected during the fiscal year?

(b) Prepare a horizontal model to show the collection of this amount. ( + for increase and - for decrease).

(c) Prepare a journal entry to show the collection of this amount.

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Answers (1)

Know the Answer?

Desmond Moody · Answer 1

A) Journal to record accrued interest earned from notes in 2019

Interest earned = notes Receivable X interest on note = 46,400x8.9%=4,129.60

Account Debit. Credit

Interest

Receivable $4129.60

Interest Expense $4129.60

If balance increases on the income Receivable by 1500,

Then 4129.6-1500 = $2,629.6

b) Horizontal model

Assets.=liabilities+stockholder equity

Interest Receivable

- $2629.60

Cash

+ $2629.60

C) To record. Interest Received

Account. Debit. Credit

Cash $2629.60

Interest Receivable $2629.60