Adjusting entry on December 31 with a debit to Interest receivable and credit to Interest Revenue for the interest generated in December.
<h3>
What is an Adjusting entry?</h3>
- 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.
<h3>What is Interest receivable?</h3>
- 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:
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Not trying to be rude but that’s too much for too little amount of points
That’s technically an entire book page of reading
Answer:
D)5,000; 7,000
Explanation:
Public is holding 2000 econs and banks reserves are 300 econs. It is mentioned that reserve requirement is 10%.
So total bank deposits must be 3000. Money supply in the economy is (3000 + 2000 = 5000)
When the reserve ratio is 0.1, that means the money multiplier is 10.
If there is an additional inflow of currency because of printing 200 econs by central bank then because of multiplier effect it will be 2000 econs.
Money supply from earlier 5000 econs will become 7000 econs.
Option D is correct.
