On November 1, 2022, Roberts Inc. provided consulting services in exchange for a one-year, 10% promissory note with a face value of $30,000. The note is interest-bearing. The note’s face value plus accrued interest compounded annually is due to be paid back when the nature matures on November 1, 2023. Roberts’s journal entry to record the collection of the note and interest on November 1, 2023, should include a: (round all calculations to the nearest whole dollar) Credit to “Interest Revenue” for $2,500. Credit to “Interest Revenue” for $3,000. Credit to “Interest Receivable” for $2,500. Credit to “Interest Receivable” for $3,000.
On November 1, 2022, Roberts Inc. provided consulting services in exchange for a one-year, 10% promissory note with a face value of $30,000. The note is interest-bearing. The note’s face value plus accrued interest compounded annually is due to be paid back when the nature matures on November 1, 2023.
Roberts’s
- Credit to “Interest Revenue” for $2,500.
- Credit to “Interest Revenue” for $3,000.
- Credit to “Interest Receivable” for $2,500.
- Credit to “Interest Receivable” for $3,000.
A financial instrument known as a promissory note comprises a written commitment by one party to pay another party a specific amount of money, either immediately or at a predetermined later date. The parameters of the debt, including the principal amount, interest rate, maturity date, date and location of issuance, and the issuer's signature, are normally all included in a promissory note. Promissory notes fall in a legal enforceability range between the looseness of an IOU and the formality of a loan contract.
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