Sam Company had an interest-bearing note receivable in the face amount of $5,400. This note...
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Accounting
Sam Company had an interest-bearing note receivable in the face amount of $5,400. This note was created on July, Year 1, as the result of a $5,400 sales transaction by Sam. The note's interest rate and due date were 8% and March 1, Year 2, respectively. The principal and all of the interest are to be collected in full on the note's due date. Sam's fiscal year ends on December 31.
Assume the customer in the sales transaction will pay all amounts in full when those amounts are due.
Q: What Interest Revenue should Sam report in its income state for Year 1?
Q: What Interest Revenue should Sam report in its balance sheet dated Dec. 31, Year 1?
Q: What Interest Revenue should Sam report in its income state for Year 2?
Q: What Interest Receivable should Sam report in its balance sheet dated Dec. 31, Year 2?
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