Metzler Communications designs and programs a web site for a local business. Metzler charges $33,000 for the project and the local business signs a 7 percent note January 1, 2011.
Required:
1. Prepare the journal entry to record the sale on January 1, 2011.
2. Determine how much interest Metzler will receive if the note is repaid on July 1, 2011.
3. Prepare Metzler’s journal entry to record the cash received to pay off the note and interest on July 1, 2011.