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On August 1, Kim Company accepted a 90-day note receivable as payment for services provided to Hsu Company. The terms of the note were $9,000 face value and 7% interest. On October 30, the journal entry to record the collection of the note should include a a.Interest Revenue for $358. b.Credit to Interest Revenue for $158. c.Notes Receivable for $258. d.Interest Receivable for $58.

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Answer:

b.Credit to Interest Revenue for $158.

Explanation:

the journal entry to record the acceptance of the note receivable:

August 1, note receivable accepted from Hsu Company

Dr Notes receivable 9,000

     Cr Service revenue 9,000

the journal entry to record the collection of cash:

October 30, cash collected from Hsu Company

Dr Cash 9,158

    Cr Notes receivable 9,000

    Cr Interest revenue 158

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