ABC Corp. converted an accounts receivable of $62,800 into a notes receivable on June 1st. The notes receivable is due on September 30th with an interest rate of 9% per annum, principal and interest are payable on September 30th. ABC Corp follows proper accrual accounting and generates monthly financials with an year end on September 30th. When the note matures it is converted into another notes receivable for 2 more months with an interest rate of 18% per year.


Required 1: Assuming no other transaction happened, what is the interest receivable as of July 31st?  

Required 2: Assuming no other transaction happened, what is the balance of Notes Receivables on September 30th?  

Required 3: Assuming no other transaction happened, what is the interest income reported on the annual Income Statement of September 30th?

Answer rating: 100% (QA)

To calculate the interest receivable as of July 31st we need to determine the interest earned from J... View the full answer