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Question 1

A table of notes receivable for 2020 follows:

NotesPrincipalInterest RatePeriod
Note 1 $29,500 2%4 months
Note 2 $8,900 6%90 days
Note 3 $26,700 12%150 days
Note 4 $101,100 9%3 months

 

For each of the notes receivable, compute the amount of interest revenue earned during 2020. Round to the nearest dollar.

NotesPrincipalInterest RateInterest PeriodInterest Revenue Earned
Note 1 4/12
Note 2 90/360
Note 3 150/360
Note 4 3/12


Question 2

Runway Company has a six-month $24,800, 6% note receivable from Breezy Winters signed on June 1, 2020.

Breezy Winters defaults on the loan on December 1.

Journalize the entry for Runway Company to record the default of the loan.

Journal
DateDescriptionDebitCredit
December 1
December 1
December 1