EX 8-20 Entries for note collected by bank

Accompanying a bank statement for Santee Company is a credit memo for $15,120 representing the principal ($14,000) and interest ($1,120) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Journalize the entry that should be made by the company to bring the accounting records up to date.


Answer:
Cash              15,120
        Notes Receivable  14,000

        Interest Revenue   1,120