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on 1/8/2019 "ABC" Company sold a truck to "CDC" Company for $145,000
on 1/8/2019 "ABC" Company sold a truck to "CDC" Company for $145,000. The buyer ("CDC" Company) paid $45,000 cash and signed a 9-month, 12% note for the balance. Based on the above-given information, answer the following questions: 1. What is the amount that "ABC" company should receive on the maturity date? o The Answer is: 2. If "ABC" Company has a calendar year, Then the company must present: • For the year ended 31/12/2019, the must present Interest revenue with an amount of on its . As on 31/12/2019 The note receivable must be presented on the statement of financial position as a • with an amount of • For the year ended 31/12/2020, the company must report interest revenue with an amount
Expert Solution
1. Answer $9,000
2 (a). For the year ended 31/12/2019, the must present interest revenue with an amount of $5,040 on its Journal Entry
(b). As on 31/12/2019 The note receivable must be presented on the statement of financial position as Current Asset with an amount of $100,000
(c). For the year ended 31/12/2020, the company must be report interest revenue with an amount of $17,040.
1. A August 1, 2019 note due in 9 month matures on May 1, 2020.
Formula for computing interest on an interest bearing note:
Interest = Face value of note 
Annual interest rate Times in terms of year
= $100,000 0.12 9 / 12
= $100,000 0.12 .75
= $9,000
2 (a). Interest revenue For the year ended 31/12/2019:
Interest = $100,000 0.12 5 / 12
= $100,000 0.12 0.42
= $5,040
(c). Interest reveue for the year ended 31/12/2020:
Interest for 2019 = $100,000 0.12 5 / 12 = $100,000 0.12 0.42 = $5,040
Interest for 2020 = $100,000 0.12 = $12,000
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