Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 17

Notes receivable-interest accrual and collection Agrico, Inc., accepted a 10-month, 12.8% (annual rate), $9,000 note from one of its customers on May 15, 2016; interest is payable with the principal at maturity.
Required:
a. Use the horizontal model or write the journal entry to record the interest earned by Agrico during its year ended December 31, 2016.
b. Use the horizontal model or write the journal entry to record collection of the note and interest at maturity.