In the following example, shouldn’t we credit A/R with 2200 instead of 2000, why is it 2000:
On February 1, 2012, Sanger Corp. lends cash and accepts a $2,000 note receivable that offers 10% interest and is due in six months. What would Sanger record on August 1, 2012, when the borrower pays Sanger the correct amount owed?
Cash 2,100 Interest Revenue 100/Notes Receivable 2,000 Interest revenue = $2,000 x 10% x 6/12 = $100