Valley Spa purchased $7,800 in plumbing components from Tubman Co. Valley Spa Studios signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note? (Use 360 days a year.)

A. 130

B. 7800

C. 7930

D. 8050

E. 8130

C. 7930

Explanation:

Calculation of the amount due on the note : -

Accounts Receivable - Valley Spa a/c Dr $7,930 To Interest Revenue A/c $130 To Notes Receivable A/c $7,800

Working : -

Interest Revenue = $7800 * 10% = $780

= $780*60/360

= $130

So the correct answer is option C. ($7930).