Borrowed $60,000 from first american bank and trust by issuing a two-year note payable (doc. no. 14) with a stated annual interest rate of 5%. check no. 545 (doc. no. 8) for $60,000 was received from the bank and deposited. reviewed the terms and conditions of the note and signed it (ray kramer) as the borrower.

It will yield a 5% reutrn over a period of two years.

each year will generate a 3,000 nterest revenue.

Explanation:

Note receivable 60,000

     Cash                             60,000

for the issue of the note

then, when the note is honor:

total interest

60,000 x 0.05 = 3,000

eduring each year an interest revenue for 3,000 will be recognize

first year:

interest receivable 3,000 debit

  interest revenue                 3,000 credit

second year (honor of the debt)

Cash   66,000 debit

  Note Receivable    60,000

  interest receivable   3,000

  interest revenue       3,000

i'm pretty sure the answer is 60.