step 1:

Assume a company has the following information:

Note Receivable: $100,000

Interest Rate: 6%

Start date: June 1

Maturity date: December 31

Given this information, what is the amount of monthly interest revenue for the note?

$106,000

$3,000

$6,000

$500

step 2:

Assume a company has the following information:

Note Receivable: $200,000

Interest Rate: 3.0%

Issue Date: November 1, Year 1

Year-end: December 31, Year 1

Maturity Date: January 31, Year 2

What will be included in the journal entry on the note's maturity date?

A credit to Interest Revenue of $500

A debit to Cash of $200,500

A debit to Cash of $206,000

A debit to Cash of $200,000

step 3:

What can a company do to improve its accounts receivable turnover?

Improve utilization of long term assets

Collect on receivables more frequently

Increase gross margins

Increase cash sales