CALCULATOR PRINTER VERSION BACK NEXT Multiple Choice Question 167 Blossom Compan

Question

CALCULATOR PRINTER VERSION BACK NEXT Multiple Choice Question 167 Blossom Company lends Vaughn Manufacturing S61200 on Apri 1, accepting a four month, 6% interest note. Blossom Company prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared? O Interest Receivable 918 Interest Revenue 918 O Note Receivable 61200 Cash 61200 O Interest Receivable 306 Interest Revenue 306 Cash 306 Interest Revenue 306 Click if you would like to Show Work for this question: een Show Work Question Attempts: O of 1 used SAVE FOR LATER

Explanation / Answer

A

Amount of interest for 1 month = (61200 * 6%)/12 = 306

Interest amount is received after 4 months, but 1 month interest amount need to be due

Hence journal entry :-

Interest Receivable Dr   306

         Interest Revenue Cr    306

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