Question

Multiple Choice Question Tresses, Inc., which has a December 31 year end, lent $1,000 on December 1 to an employee at 6% due in 6 months. When will Tresses record Interest Revenue? It will record ______. Multiple choice question. an adjusting entry on December 31 with a debit to Interest Receivable and credit to Interest Revenue for the interest generated in December a daily entry with a debit to Interest Receivable and credit to Interest Revenue for each day's interest generated interest earned on the payment date with a debit to Cash and credit to Interest Revenue for the 6 months of interest generated

Answer 1

Adjusting entry on December 31 with a debit to Interest receivable and credit to Interest Revenue for the interest generated in December.

What is an Adjusting entry?

• Adjusting entries and journal entries used in accounting and accounting to assign income and expenditure to the period in which they actually occurred.
• They are often made at the end of an accounting period. Under accrual-basis accounting, the revenue recognition principle serves as the foundation for adjusting entries related to unearned and accrued revenues.
• Because they are done on balance day, they are occasionally referred to as balance day adjustments.
• Revenues and related costs are recorded in the same accounting period according to the matching concept of accrual accounting.
• The actual money, however, can be received or paid at a separate period.

What is Interest receivable?

• The amount of interest that has been earned but has not yet been paid out in cash is known as interest receivable.
• Many organizations won't record this number because they believe it to be irrelevant.

Therefore, it will record an Adjusting entry on December 31 with a debit to Interest receivable and credit to Interest Revenue for the interest generated in December.

Know more about Interest receivables here:

brainly.com/question/24696035

#SPJ4