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5 September, 02:42

Borrowed $60,000 from First American Bank and Trust by issuing a two-year note payable (Doc. No. 14) with a stated annual interest rate of 5%. Check No. 545 (Doc. No. 8) for $60,000 was received from the bank and deposited. Reviewed the terms and conditions of the note and signed it (Ray Kramer) as the borrower.

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  1. 5 September, 04:59
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    It will yield a 5% reutrn over a period of two years.

    each year will generate a 3,000 nterest revenue.

    Explanation:

    Note receivable 60,000

    Cash 60,000

    for the issue of the note

    then, when the note is honor:

    total interest

    60,000 x 0.05 = 3,000

    eduring each year an interest revenue for 3,000 will be recognize

    first year:

    interest receivable 3,000 debit

    interest revenue 3,000 credit

    second year (honor of the debt)

    Cash 66,000 debit

    Note Receivable 60,000

    interest receivable 3,000

    interest revenue 3,000
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