On May 1, 2021, a company lends $100,000 to one of its main suppliers and accepts a 12-month, 6% note. Record the acceptance of the note on May 1, 2021, the adjustment on December 31, 2021, and the cash collection on May 1, 2022.
What will be an ideal response?
| May 1, 2021 | Debit | Credit |
| Notes Receivable | 100,000 | ? |
| Cash | ? | 100,000 |
| December 31, 2021 | ? | ? |
| Interest Receivable | 4,000 | ? |
| Interest Revenue | ? | 4,000 |
| May 1, 2022 | ? | ? |
| Cash | 106,000 | ? |
| Notes Receivable | ? | 100,000 |
| Interest Receivable | ? | 4,000 |
| Interest Revenue | ? | 2,000 |
Interest revenue 2022 = $100,000 × 6% × 4/12 = $2,000.
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