Young company lends dobson industries $40,000 on august 1, 2014, accepting a 9-month, 12% interest note. if young accrued interest at its december 31, 2014 year-end, what entry must it make to record the collection of the note and interest at its maturity date?
Journal entry for the collection of the note at its maturity:
It is given that the company lends $40,000 on august 1, 2014, accepting a 9-month, 12% interest note. And it has accrued interest at its December 31, 2014 year-end, so Interest Receivable shall be 40,000*12%*5/12 = $2,000. The journal entry to record the collection of the note and interest at its maturity date 30th April 2015 shall be as follows:
Account titles Debit Credit
Interest receivable $2,000
Interest Revenue $1,600
Notes Receivable $40,000
(Being notes receivable collected on its maturity date)
(Note: The interest revenue is calculated for the period of Jan. 1, 2015 to April 30, 2015 = 40,000*12%*4/12 = $1,600)
cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.
empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.
optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.
instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.
harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.
social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.