On November 19, Nicholson Company receives a $21,000, 60-day, 10% note from a cu

Question

On November 19, Nicholson Company receives a $21,000, 60-day, 10% note from a customer as payment on account. What adjusting entry should be made on the December 31 year-end? (Use 360 days a year.)

Multiple Choice

Debit Notes Receivable $245; credit Interest Receivable $245.

Debit Interest Receivable $350; credit Interest Revenue $350.

Debit Interest Receivable $245; credit Interest Revenue $245.

Debit Interest Revenue $350; credit Interest Receivable $350.

Debit Notes Receivable $105; credit Interest Revenue $105.

Explanation / Answer

Adjusting entry

So answer is c) debit interest receivable $245 : credit interest revenue $245

Date account and explanation debit credit Dec 31 Interest receivable 245 Interest revenue 245 (to record adjusting entry)

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