Brief Exercise 5-53 Notes Receivable Harrigan Enterprises utilizes Snoopy Systems to design and implement a cash management system. Due to Harrigan's cash management problems, it cannot currently pay for the system out of pocket. Snoopy chooses to extend a 6% note on January 1, 2019, for the $27,000 project cost. Required: 1. Prepare Snoopy's journal entry to record the service performed on January 1, 2019. Notes Receivable V 27,000 Sales Revenue 27,000 Record sale with note Feedback Check My Work 1. Revenue can be recognized when earned, even if the customer has not paid, as long as collectability is reasonably assured. 2. Determine how much interest Snoopy will receive if the note is repaid on May 1, 2019. Feedback Check My Work 2. When calculating interest, consider the principal, the annual interest rate and the duration of the note 3. Provide Snoopy's journal entry to record the cash received to pay off the note and interest on May 1, 2019. If an amount box does not require an entry, leave it blank. Cash 27,540 Interest Expensex 540 Notes Receivable 27,000 Record collection of note plus interest Feedback Check My Work 3. Interest Income is recognized as it is earned. Feedback Check My Work Partially correct 3. Provide Snoopy's journal entry to record the cash received to pay off the note and interest on May 1, 2019. If an amount box does not require an entry, leave it blank. Cash 27,540 Interest Expense x 540 27,000 Cash Rec plus interest Interest Expense Interest Income Interest Payable Interest Receivable cognized as it is earned