Question

On August 1, 2021, Turner Manufacturing lends cash and accepts a $24,000 note receivable that offers 4% interest and is due in nine months. How would Turner record the year-end adjustment to accrue interest in 2021? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)
A. Interest Revenue 476
Interest Receivable 476
B. Interest Receivable 960
Interest Revenue 960
C. Interest Receivable 476
Interest Revenue 476
D. Interest Receivable 400
Interest Revenue 400

Answer 1

Answer:

credit interest receivable200. debit interest revenue 200

Explanation:

Answer 2

Answer:

Note amount: $6,000

Interest amount: 8%

Months left in the year: 5

To solve:

Multiply the note amount by the percentage and the amount of months left out of the year.

$6,000 x 8% x 5/12 = $200

Journal Entry:

Interest Receivable $200

Interest Revenue $200

Explanation: