Ask Question
BusinessBusiness
11 January, 17:10

Pozzi Company, a cash basis business, received $16,930 cash as payment on a loan Pozzi made to a business associate two years ago. The payment consisted of a $15,000 principal payment and $1,930 interest. On receipt of the cash, Pozzi recognizes:

+5
Answers (1)
  1. 11 January, 17:15
    0
    cash 16,930

    note receivable 15,000

    interest revenue 1, 930

    Explanation:

    Pozzi works his accounting under cash basis. This means it do not recognize any interest revenue over the past of time. It will recognize the gain on the loan entirely at maturity, when the cash is received.

    Therefore his journal entry at maturity will be:

    a debit to cash forthe received amount

    a credit to note receivable, to write-off the balance

    and a credit to interest revenue to recognize this gain.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Pozzi Company, a cash basis business, received $16,930 cash as payment on a loan Pozzi made to a business associate two years ago. The ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
XYZ Pharmaceuticals recently announced that the clinical trials for a cancer drug failed to cure the illness. This announcement led to a dramatic decrease in the stock value of the company.
Answers (1)
In the united states, what does the general level of a family's income have to do with the amount of cash the family is likely to hold? novanet
Answers (1)
The records of Hoffman Company reflected the following balances in the stockholders' equity accounts at December 31, 2018: Common stock, par $12 per share, 50,000 shares outstanding. Preferred stock, 8 percent, par $19.
Answers (1)
The second-price auction model a. determines how much the second-highest bidder will be charged b. charges the highest bidder only a penny more than the bid of the second-highest bidder c.
Answers (1)
If producers moved the price from P3 to p1 A) producers would encounter a shortage. B) buyers would likely purchase fewer widgets. C) producers would be less willing to make widgets. D) buyers would scramble to get all available widgets.
Answers (2)
New Questions in Business
A firm realizes that the market price has fallen below its average total costs, and it is now earning a loss. what is the best action for the firm to take in the short run?
Answers (1)
Fixed expenses: a. includes labor, raw materials, and commissions. b. can be estimated by taking into consideration the production. c. are incurred regardless of sales volume. d. must be linked to strategy in the business plan
Answers (1)
4) Which of the following is least likely to be your primary health care provider? a. an allergist b. an internist c. an obstetrician-gynecologist
Answers (1)
T/F A macroeconomist would be concerned with the following statement. "Two major hurricanes caused significant damage to the eastern seaboard and led to a fall in GDP and a rise in unemployment in the U. S. economy."
Answers (1)
At the beginning of the year, Mitchum Enterprises allows for estimated uncollectible accounts of $14,000. By the end ofthe year, actual bad debts total $15,000. Record the write-off to uncollectible accounts.
Answers (1)
Home » Business » Pozzi Company, a cash basis business, received $16,930 cash as payment on a loan Pozzi made to a business associate two years ago. The payment consisted of a $15,000 principal payment and $1,930 interest. On receipt of the cash, Pozzi recognizes:
Sign Up Forgot Password?