[kokimwa]

On July 1, ABC company was created and has a balance of
Cash: 11000
Accounts Receivable:13000
Notes Payable: 18000
Revenue:3000
Capital Stock: 3000

and transactions such as these appears:

1. The note payable was issued on September 1, 2006. It is a 11%, nine-month note
2. Revenues earned but unbilled at December 31 total $6,000

What should be the amount for accounts receivable and interest on Dec 31 of the balance sheet?

I was thinking
Interest = 990 because 18000 x 0.11 x (6/12) = 990
A/R = 19000 because 13,000 + 6000 = 19000

Could somebody help me out?

[morgaine300]

Hi. Don't know if it's too late for an answer. I just joined tonight and am going back finding questions from a couple of days ago.

The account receivable is correct.

The interest, however, is not. You started OK, but it's not 6/12. You figured it for a half year because the company started on July 1. However, the loan did not exist at that time. The loan was gotten on Sept. 1 and it's now year-end. So how many months has the loan actually existed and therefore been accruing interest?