Question

on august 2, jun company receives a $6,400, 90-day, 14.0% note from customer ryan albany as payment on his $6,400 account receivable. prepare juns journal entry assuming the note is honored by the customer on october 31 of that same year. note: do not round intermediate calculations. round your answers to nearest whole dollar value. use 360 days a year. view transaction list journal entry worksheet 1 record cash received on note plus interest. note: enter debits before credits. date general journal debit credit october 31 record entry clear view general journal

Explanation:

Step1: Calculate Interest

The formula for simple interest is $I = P \times r \times t$, where $P = 6400$, $r = 0.14$, and $t = \frac{90}{360}$. So, $I = 6400 \times 0.14 \times \frac{90}{360} = 6400 \times 0.14 \times 0.25 = 224$.

Step2: Determine Cash Received

Cash received is the principal plus interest, so $6400 + 224 = 6624$.

Step3: Journal Entry

On October 31, we debit Cash for the total received ($6624$), credit Notes Receivable for the principal ($6400$), and credit Interest Revenue for the interest earned ($224$).

Answer:

Date	General Journal	Debit	Credit
	Notes Receivable		6400
	Interest Revenue		224