On August 1, 2021, Turner Manufacturing lends cash and accepts a $24,000 note receivable that offers 10% 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 1,050 Interest Receivable 1,050 B. Interest Receivable 2,400 Interest Revenue 2,400 C. Interest Receivable 1,050 Interest Revenue 1,050 D. Interest Receivable 1,000 Interest Revenue 1,000
On August 1, 2021, Turner Manufacturing lends cash and accepts a $24,000 note receivable that offers 10% 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 1,050 Interest Receivable 1,050 B. Interest Receivable 2,400 Interest Revenue 2,400 C. Interest Receivable 1,050 Interest Revenue 1,050 D. Interest Receivable 1,000 Interest Revenue 1,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On August 1, 2021, Turner Manufacturing lends cash and accepts a $24,000 note receivable that offers 10% 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 | 1,050 | |
| Interest Receivable | 1,050 | ||
| B. | Interest Receivable | 2,400 | |
| Interest Revenue | 2,400 | ||
| C. | Interest Receivable | 1,050 | |
| Interest Revenue | 1,050 | ||
| D. | Interest Receivable | 1,000 | |
| Interest Revenue | 1,000 |
Expert Solution
Step 1: Introduction
The adjustment entries are prepared to adjust the revenue and expenses for the current period. The interest receivable is the amount of interest earned but not received yet.
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