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Android Products, Inc., agreed to accept a $1,000, one-year, 10 percent note from C. Mate. On its maturity date of December 16, Mate honors the note by making a payment of $1,100. That payment consisted of the principal of $1,000 plus interest in the amount of $100 (computed as $1,000 x 10%).Prepare the necessary December 16 entry for Android by selecting the account names

Answer :

Answer:

Given that,

Note value = $1,000

Time period = 12 months

Interest rate = 10 percent

Interest amount:

= $1,000 × 10%

= $100

Therefore, the journal entry is as follows:

On December 16,

Cash A/c Dr. $1,100

     To Notes Receivable  $1,000

     To Interest revenue    $100

(To record the note receivable)

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