Question
ABC Co. has the following transactions related to Notes Receivable during the last 2 months of 2020. The company does not make entries to accrue
ABC Co. has the following transactions related to Notes Receivable during the last 2 months of 2020. The company does not make entries to accrue interest except on December 31.
Nov. 1 Give A Loan of $30,000 cash to XYZ Company on a 12-month, 10% note.
Dec. 11 Sold goods to ROSE Inc., receiving a $6,750, 90-day, 8% note.
Dec. 16 Received a $4,000, 60 days, 9% note in exchange for Joe`s outstanding accounts receivable.
Dec. 31 Accrued interest revenue on all Note`s Receivables.
During 2021, the notes dated November 1 and December 16 were honored but December 11 note was dishonored. On May 20, 2021, ROSE Inc. account was written off by ABC Company under Allowance method.
On the maturity date of December 16, Joe honored the note and ABC company record includes:
a.
Credit Interest Revenue with $59.2
b.
Debit Cash with $4,059.2
c.
None of the given options.
d.
Debit Cash with $4,000
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