on december 1, bright company receives a 6% interest-bearing note from galvalume company to settle a $20,000 account receivable. the note is due in three months. at december 31, bright should record interest revenue of a.$100. b.$600. c.$0. d.$200.

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04-11-2022
Business

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on december 1, bright company receives a 6% interest-bearing note from galvalume company to settle a $20,000 account receivable. the note is due in three months. at december 31, bright should record interest revenue of a.$100. b.$600. c.$0. d.$200.

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tutorconsortium126 tutorconsortium126 · Answer 1 · 2022-11-08T01:30:33-05:00

At December 31, bright should record interest revenue of $100. Money gained by lending money or money acquired from depositing or investing can both be referred to as interest revenue.

Is interest revenue a liability or an asset?

If a company anticipates receiving the interest payment within the year, it typically records the interest receivable as a current asset on its balance sheet. Companies that collect interest from loans view this revenue as a significant source of income that belongs at the top of the income statement. It is the price of taking out a loan from a bank, financial institution, bond buyer, or another lender. In order to assist a business finance its operations, such as the acquisition of rival businesses or machinery, plant, and property, interest expense is incurred.

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