Learning Objective 5: Apply GAAP for notes receivable) Record the following note receivable transactions in the journal of Arabian Realty. How much interest revenue did Arabian earn this year? Use a 365-day year for interest computations, and round interest amounts to the nearest dollar. Arabian Realty has an October 31 fiscal year-end. ****************************************************************** Aug1. Loaned $10,000 cash to Candace Smith on a one-year, 7% note. ___________________________________________________________________________ Oct6 Performed service for Putt Pro, receiving a 90-day, 6% note for $15,000. ____________________________________________________________________________ Oct16 Received a $2,000, six-month, 11% note on account from Vernon, Inc. ____________________________________________________________________________ Oct31 Accrued interest revenue for the year. ****************************************************************** Which is correct Aug 1: 10,000x0.07x12/12= $700 Oct 6: 15,000x0.06x90/365= $222 Oct 16: 2,000x0.11x6/12= $110 _________ Interest Revenue= $1,032. Or 31-Oct Interest Receivable (10000 * .07*1) Candace Smth $700.00 (15000 0.06 3) Putt Pro. $2,700.00 (2000 0.11 6) (Vernon) $1,320.00 _____________ Interest Revenue $4,720.00