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Marina86 [1]
2 years ago
6

On December 1, 2021, Liang Chemical provides services to a customer for $90,000. In payment for the services, the customer signs

a three-year, 10% note. The face amount is due at the end of the third year, while annual interest is due each December 1. Required: Record the acceptance of the note on December 1, 2021. Record the interest collected on December 1 for 2022 and 2023, and the adjustment for interest revenue on December 31 for 2021, 2022, and 2023. Record the cash collection on December 1, 2024.
Business
1 answer:
Rufina [12.5K]2 years ago
8 0

Answer

Dec 1 2021                        Debit                           Credit

Note Receivable              90,000

Service Revenue                                                   90,000

Dec 1 2022

Cash                                  9,000

Interest Revenue                                                  9,000

Dec 1 2023                  

Cash                                9,000

Interest Revenue                                                  9,000

Dec 1 2024              

Cash                               99,000

Interest Revenue                                                  9,000

Note Receivable                                                   90,000

Dec 31 2021

Interest Receivable     750

Interest Revenue                                                        750

Dec 31 2022

Interest Receivable     750

Interest Revenue                                                        750

Dec 31 2023

Interest Receivable     750

Interest Revenue                                                        750

Explanation:

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