Asked Jan 5, 2020

What is the formula to compute interest on a note receivable?


Expert Answer

Step 1

Note receivable: Note receivable refers to a written promise for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to lender or creditor. Notes receivable is an asset of a business.

Interest on note receivable: Interest on note receivable is the amount charged on the principal value of note for the privilege of borrowing money. Interest is to be paid by the borrower and to be received by the lender.

Step 2

State the formula used to compute the interest on note receivable.

Formula to...

Accounting homework question answer, step 2, image 1

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