Ch7. Video 16 - Notes Receivable example

The video tutorial explains how to journalize loan transactions between Kilo and Lima Company, focusing on interest calculations and journal entries. It covers three examples: a nine-month note crossing fiscal years, a nine-month note within a single year, and a 90-day note using day-based interest calculations. The tutorial emphasizes the importance of adjusting entries at year-end and recognizing interest revenue.

How much interest was accrued by December 31st?

What is the total cash received when the loan matures?

What is the significance of the date February 1st in the context of the loan?

How is interest calculated for a loan that is expressed in days?