On October 1, 2023, Corporation 1 issued a $100,000 note payable to Corporation 2. The note carries a 10% annual interest rate. All Interest and principal is due to Corporation 2 on March 31, 2024. All proper adjusting journal entries were made on their respective books at December 31. The journal entry to be recorded by Corporation 2 when the note is paid on
On October 1, 2023, Corporation 1 issued a $100,000 note payable to Corporation 2. The note carries a 10% annual interest rate. All Interest and principal is due to Corporation 2 on March 31, 2024. All proper adjusting journal entries were made on their respective books at December 31. The journal entry to be recorded by Corporation 2 when the note is paid on
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 92PSA
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![On October 1, 2023, Corporation 1 issued a $100,000 note payable to Corporation 2. The
note carries a 10% annual interest rate. All Interest and principal is due to Corporation 2 on
March 31, 2024. All proper adjusting journal entries were made on their respective books at
December 31. The journal entry to be recorded by Corporation 2 when the note is paid on
March 31, 2024 will include: A) A credit to Interest Receivable for $2,500. B) A debit to cash
for $2,500. C) A debit to interest revenue for $5,000. D) A credit to cash for $105,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F23603c1a-b91a-4320-9fcc-6884c096e571%2F5aceb9f3-05b5-4bf0-a561-f7f2bbac48b8%2F3iqbzf_processed.png&w=3840&q=75)
Transcribed Image Text:On October 1, 2023, Corporation 1 issued a $100,000 note payable to Corporation 2. The
note carries a 10% annual interest rate. All Interest and principal is due to Corporation 2 on
March 31, 2024. All proper adjusting journal entries were made on their respective books at
December 31. The journal entry to be recorded by Corporation 2 when the note is paid on
March 31, 2024 will include: A) A credit to Interest Receivable for $2,500. B) A debit to cash
for $2,500. C) A debit to interest revenue for $5,000. D) A credit to cash for $105,000
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