00:01
So we will understand the concept of notes receivable but it is nothing but the medium to raise the loans.
00:16
Okay, but we will understand it through the example.
00:19
So it will be more clear to you.
00:25
Let's suppose mr.
00:27
A issues $100 ,000 notes receivable at the rate of 10 % of 10 % for 36 months.
00:53
It means so to mr.
00:57
C.
00:57
Okay, notes receivables are being issued to mr.
00:59
C.
01:00
Now mr.
01:01
A, of course at the end of 36 months will receive $100 ,000 plus 10 % interest okay for each of the year because there are three years, 36 months will mean there are three years because 12 months will give us one year so 36 so 36 months will give us three years so mr a will be so mr a will be earning how much interest income 10 % applied on 100 000 it means thousand dollars in year 1 ,000 1 ,000 dollars in year 2 likewise in year 3 and at the end of year 3 also he will likely to receive $100 ,000 as the principal amount.
02:17
So for the year one, what will be the case? the case will be that this portion, this first portion will be the income income of mr.
02:36
A and these two, these two portions will be what will be interest, interest receivable...