On December 1, 2016, Roper Corp. accepted a two-month, $24,000 interest-bearing note from a customer in payment of an account receivable. On December 31, 2016, Roper made the following adjusting entry:

Required
1. What is the interest rate on the note? Explain your answer.
2. Prepare the entry on Roper's books on January 31, 2017, when the company collects the principal and interest on the note.

Transcribed Image Text:

2016 Dec. 31 Journal Entry Analysis Interest Receivable 200 Interest Revenue To record interest earned for one month on a $24,000 note 200 Balance Sheet Income Statement NET INCOME ASSETS EQUITY REVENUES -EXPENSES nteresLIABILITIESIOLDERS Interest 200 Interest 200 Receivable 200 Revenue 200