On July 9, Mifflin Company receives an $8,500, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on the maturity date assuming the maker pays in full, and no adjusting entries have been made related to the note?

Question

Business

Ryan Hudson

3 February, 05:14

On July 9, Mifflin Company receives an $8,500, 90-day, 8% note from customer Payton Summers as payment on account. What entry should be made on the maturity date assuming the maker pays in full, and no adjusting entries have been made related to the note?

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Answers (1)

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Cheyanne Randall · Answer 1

Data given

Note receivable = $8,500

Interest rate = 8%

Days = 90

The Journal Entry is shown below:-

Cash Dr, $8,760

To Interest Revenue $170

To Notes receivable $8,500

(To record the Interest and Note received in cash)

Note : -

Interest revenue = $8,500 * 8% * 90 : 360 days

= $170