Question

! Required information [The following information applies to the questions displayed below.] Husemann Co.'s assets include notes receivable from customers. During fiscal 2019, the amount of notes receivable averaged $45,200, and the interest rate of the notes averaged 8.7%. a-2. Prepare a horizontal model that accrues the interest revenue earned from the notes. (Use amounts with + for increases and amounts with – for decreases) Balance Sheet Assets Liabilities + Stockholders' Equity Net Income Revenu

Answer 1

BALANCE SHEET

INCOME STATEMENT

Assets

=

Liabilities

+

Equity

Net income

=

Revenue

-

Expenses

Interest receivable

+3932.40 [45200*8.7%]

+3932.40

+3932.40

Interest revenue

+3932.40

b-1)Amount of interest collected = Interest accrued during the period -increase in interest receivable

                     = 3932.40 - 2150

                     = 1782.40

b-2)

Assets

=

Liabilities

+

Equity

Net income

=

Revenue

-

Expenses

Cash

+1782.40

Interest receivable

-1782.40