Case
On April 1, 20X1, James Company, a calendar-year company sold merchandise to Herbert
Company on credit and received in return an interest-bearing note receivable from Herbert
Company. James Company will receive interest at the prevailing rate for note of this type. Both
the principal and interest are due in one lump on March 31, 20X2.
When should James Company report interest revenue from the note receivable? Discuss the
rationale for your answer.Your answer should be supported by citing ONLY from the FASB's pronouncements such as Concepts Statements and or Accounting Standards Codification (ASC). No other citations including the TEXTBOOK are acceptable.