record the signing of the note in payment of legal services, & record the cash r

Question

record the signing of the note in payment of legal services, & record the cash received on note receivable and interest.

On March 1, Terrell & Associates provides legal services to Whole Grain Bakery regarding some recent food poisoning complaints. Legal services total $9,000. In payment for the services, Whole Grain Bakery signs a 8% note requiring the payment of the face amount and interest to Terrell & Associates on September 1 Required: For Terrell & Associates, record the acceptance of the note receivable on March 1 and the cash collection on September 1, (If no entry is required for a transactionievent, select "No journal entry required" in the first account field J

Explanation / Answer

Revenue (cr) $9000
notres receivable (db) $9000

cash (db) =9000*8%/2=$3600+9000=$12600
Notes receivable (cr) $9000
Interest income (cr) $3600

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