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1 February, 13:47

On January 1, JC Co. accepted a 60-day, 6%, note in the amount of $10,000 from a customer. On March 2, the due date of the note, the customer honors the note and pays in full. The journal entry that JC would make to record the receipt of payment of this note would include a debit to: Notes Receivable in the amount of $10,100 Cash in the amount of $10,100 Notes Receivable in the amount of $10,000 Cash in the amount of $10,000

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  1. 1 February, 15:45
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    Cash account in the amount of $10,100

    Explanation:

    The journal entry to be recorded for the receipt of payment is as:

    Cash A/c ... Dr $10,100

    Note receivable A/c ... Cr $10,000

    Interest Revenue A/c ... Cr $100

    Being recoded the receipt of payment

    As payment is received so asset is increasing and any increase in asset is debited. Therefore, cash account is debited. And the note receivable got decrease will be credited and the interest revenue is also credited.

    Computation of interest revenue is as:

    Interest revenue = Amount * % of note * Days / Number of days in a year

    = $10,000 * 6% * 60 / 360

    = $100

    Note: Assume 360 days in a year
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