E5.16 Notes receivableinterest accrual and collection Husemann Co.s assets include notes receivable from customers. During fiscal 2013, the amount of notes receivable averaged $138,750, and the interest rate of the notes averaged 4.8%.

Required:

Calculate the amount of interest income earned by Husemann Co. during fiscal 2013 and show in the horizontal model or write a journal entry that accrues the interest income earned from the notes.

Notes Receivable = $138,750

Interest rate = 4.8%

If the balance in the Interest Receivable account increased by $1,500 from the beginning to the end of the fiscal year, how much interest receivable was collected during the fiscal year? Use the horizontal model, a T-account, or write the journal entry to show the collection of this amount.