How to Calculate Interest Receivable and Interest Revenue for Notes Receivable

Companies often extend credit to other businesses in the form of a note, or a short-term loan. Most notes pay a stated rate of interest, resulting in interest revenue that the lender must record at various points in time until the note comes due.

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Computer keyboard with a magnifying glass hovering over a key that says loan. — Image source: Getty Images.

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On Dec. 31, 2015, you would record $52.50 as a credit to interest revenue. Interest receivable would be debited by an equal amount. The remaining interest would be accrued as revenue in future periods as the interest is earned.

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