g Skysong, Inc. lends Concord industries $40800 on August 1, 2022, accepting a 9-month, 9% interest note. If Skysong, Inc. accrued interest at its December 31, 2022 year-end, what entry must it make to record the collection of the note and interest at its maturity date

May 1 2022 Cash 435540 Dr

Notes Receivable 408000 Cr

Interest Revenue 12240 Cr

Interest Receivable 15300 Cr

Explanation:

The interest revenue for 5 months was already recorded on 31 december against an interest receivable account that has a balance of 5 months of interest due.

The interest on note for 9 month period is = 408000 * 0.09 * 9/12 = $27540

The 5 month interest recorded on 31 december is 408000 * 0.09 * 5/12 = 15300

Thus, the interest revenue to be recorded on May 1 will be 4 months interest that is 27540 - 15300 = 12240