Accounting Question! Need help ASAP?

Question

Here is the transaction we're solving for: After holding his nephew hostage, Mayor Quimby agreed to pay the note he owed to Mr. Burns. Mayor Quimby raised taxes to get the funds.

Here is the transaction that the above information refers to:
Mr. Burns Sold cookies on account to Mayor Quimby for his nephew's 18th birthday party. Mr. Burns sold $150,000 worth of cookies. The terms were n/30 and the cost of merchandise sold was $50,000.

I know the answer for the transaction we're solving for. It's:
DR Cash 152,813 and
CR Interest Revenue 2,813
CR Notes Receivable - Quimby 150,000

I just don't understand how to get the interest so could someone explain that to me! Thank you!

? · Accepted Answer

I think there's something missing in your given problem. There's should be a stated interest rate to be given for you to compute your interest revenue. The suggested answer from your problem used compound entry for journalizing its transaction. Here's my answer:

Upon the occurrence of business transaction using single entry method:

Debit Notes Receivable $150,000
Credit Sales $ 150,000
#
Debit Cost of Goods Sold $ 50,000
Credit Inventory $ 50,000

Upon receipt using single entry method:

Debit Cash $ 150,000
Credit Notes Receivable $ 150,000

Debit Cash $ ?
Credit Interest Revenue $ ?
Using formula: Interest Revenue: Interest Rate X Principal ($150,000) X Time

? · Answer

promoting your account isn't allowed. Doing it may desire to effect in not in undemanding terms your account to be banned, yet additionally the clientele account. Any action in genuine existence using the money owed (inclusive of using genuine money, and so on.) isn't allowed. All money owed are assets of Jagex. So... do not do it. basically go away it on my own. Why sell your account? that's stupid. basically go away it particularly is. i've got not messed with my account in like 2 years.

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Accounting Question! Need help ASAP?

2 Answers