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nexus9112 [7]
3 years ago
14

Post Company lends Blue Company $40,000 on April 1, accepting a 4 month, 4.5% interest note. Post Company prepares financial sta

tements on April 30. What adjusting entry should they make?
Debit note receivable $40,000; Credit Cash $40,000

Debit interest receivable $150; Credit interest revenue $150

Debit cash $150; Credit interest revenue $150

Debit interest receivable $600; Credit interest revenue $600
Business
1 answer:
creativ13 [48]3 years ago
4 0

Answer:Debit interest receivable $150; Credit interest revenue $150--- B

Explanation:

Interest Receivable =  Principal x Rate x Time ( from  April 2st to 31st--Imonth)

$40,000 x 4.5% x 1/12

= $ 150

Journal entry to record amount on interest note on  April 31st

Date           Account  titles                     Debit                    Credit

April 31st     interest receivable             $150

interest revenue                                                                   $150

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