Record the receipt of the note on august in settlement

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On August 1, year 1, Hampton Construction received a 4.5 percent, 6-month note receivable from Dusty Roads, one of Hampton Construction's problem credit customers. Roads had owed $38,500 on an outstanding account receivable. The note receivable was taken in settlement of this amount. Assume that Hampton Construction makes adjusting entries for accrued interest revenue once each year on December 31.

Problem 1: Record the receipt of the note on August 1 in settlement of the account receivable.

Problem 2: Record accrued interest at December 31, year 1.

Reference no: EM132832750

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