Respuesta :
Answer:
Correct option is c.
Interest Receivable A/c Dr. $600
To Interest Revenue $600
Explanation:
Provided details,
Loaned amount = $90,000
Interest rate on note payable = 8%
Period of note payable = 3 months from 1 December 2010 to 28 Feb 2011
Since it is for 3 months but interest revenue to be received for the month of December 2010 will be recorded, in 2010 itself.
Thus, interest = $90,000 [tex]\times[/tex] 8% = $7,200
Now, interest total to be received on 3 months notes payable = 7,200 [tex]\times[/tex] 3/12 = $1,800
Interest for 1 month = $1,800/3 = $600
Thus, entry on 31 December will be:
Interest Receivable A/c Dr. $600
To Interest Revenue $600
Therefore, correct option is c.
Answer:
The correct answer is c.
Debit Interest Receivable and credit Interest Revenue, $600
Explanation:
In the question, we have to pass an adjusting entry of note receivable so for that we have to debit the interest receivable Account and credit the interest revenue Account.
The calculation of interest receivable is shown below:
= Loan amount × number of months ÷ total number of months in a year × rate
= $90,000 × 1 ÷ 12 × 8%
= $600
The 1 month is calculated from December 1, 2010 to December 31, 2010. And, we ignored the 3 month period because we have to compute till December 31.
So, the adjusting entry would be shown below:
Interest receivable Account A/c Dr $600
To Interest revenue Account $600
(Being adjusting entry recorded in respected of notes receivable)
Hence, the correct answer is c.
Debit Interest Receivable and credit Interest Revenue, $600
