QUESTION 7 On April 1, 2020, Balboa Company invests $50,000 in a 6-month CD that pays an annual interest rate of 3 percent. Assume Balboa prepares financial statements at the end of each calendar month. Which of the following statements is true? O a. Balboa will debit cash by $50,000 on April 1. O b.Balboa will report an interest receivable asset of $375 on its June 30 balance sheet. O c. Balboa will debit interest income by $125 on April 30. O d. Balboa will debit interest receivable by $250 on May 30.
QUESTION 7 On April 1, 2020, Balboa Company invests $50,000 in a 6-month CD that pays an annual interest rate of 3 percent. Assume Balboa prepares financial statements at the end of each calendar month. Which of the following statements is true? O a. Balboa will debit cash by $50,000 on April 1. O b.Balboa will report an interest receivable asset of $375 on its June 30 balance sheet. O c. Balboa will debit interest income by $125 on April 30. O d. Balboa will debit interest receivable by $250 on May 30.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:QUESTION 7
On April 1, 2020, Balboa Company invests $50,000 in a 6-month CD that pays an annual interest rate of 3 percent. Assume
Balboa prepares financial statements at the end of each calendar month. Which of the following statements is true?
O a. Balboa will debit cash by $50,000 on April 1.
O b.Balboa will report an interest receivable asset of $375 on its June 30 balance sheet.
O C. Balboa will debit interest income by $125 on April 30.
O d. Balboa will debit interest receivable by $250 on May 30.
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