Because of the revenue recognition principle,interest on a note receivable is recorded in the year in which it is earned.

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The revenue recognition principle states that revenues should be recognized in the accounting periods in which they are earned, regardless of when they are received. Therefore, interest on a note receivable should be recognized in the year in which it is earned, even if the payment is received in a different year.

Because of the Revenue Recognition Principle,interest on a Note Receivable