Answer:
note receivables 10,700 debit
fees earned 10,700 credit
--to recortd acceptance of promissory note forlegal services--
cash 11,235 debit
interest revenue 535 credit
note receivable 10,700 credit
--to record collection of the note--
Explanation:
acceptance: we will declare the revenue and create the note receivable
then, on September 1st we calculate the interest and recognize the revenue for them:
principal x rate x time = interest
10,700 x 10% x 6 month = 10,700 x 0.1 x 0.5 = 535 dollars
We will recieve in cash principal plus interest
and write-off the receivables.