LO $7-5$

Exercise $7-12$A Notes receivable$-$accrued interest

On May $1,$ Year $1,$ Benz's Sandwich Shop loaned $$10,000$ to Mark Henry for one year at $6$ percent interest.

Required

Answer the following questions:

a$.$ What is Benz's interest income for Year $1?$

b$.$ What is Benz's total amount of receivables at December $31,$ Year $1?$

c$.$ How will the loan and interest be reported on Benz's Year $1$ statement of cash flows?

d$.$ What is Benz's interest income for Year $2?$

e$.$ What is the total amount of cash that Benz's will collect in Year $2$ from Mark Henry?

f$.$ How will the loan and interest be reported on Benz's Year $2$ statement of cash flows?

g$.$ What is the total amount of interest that Benz's earned on the loan to Mark Henry?