On August 1, 2014, Miles Company accepted from another company a one-year note receivable with a face amount of $4,000 and an interest rate of 8%.
What would be the total amount of assets (related to the note receivable) reported on Muller's balance sheet dated December 31, 2014?
A) $4,000
B) $4,133
C) $4,320
D) $4,187

Question

Quizplus · Accepted Answer

The correct answer is B. The total amount of assets (related to the note receivable) reported on Muller's balance sheet dated December 31, 2014, would be $4,133. This is because the note receivable has a face amount of $4,000 and an interest rate of 8%. The interest for the period from August 1, 2014, to December 31, 2014, is $4,000 x 8% x (5/12) = $133. Therefore, the total amount of assets (related to the note receivable) reported on Muller's balance sheet dated December 31, 2014, would be $4,000 + $133 = $4,133.

On August 1, 2014, Miles Company Accepted from Another Company