On August 1, 2012, Turner Manufacturing lends cash and accepts a $21,000 note re

Question

On August 1, 2012, Turner Manufacturing lends cash and accepts a $21,000 note receivable that offers 8% interest and is due in nine months. interest and is due in nine months. How would Turner record the year-end adjustment to accrue interest in 2012? (Round your answer to the nearest dollar amount.)

On August 1, 2012, Turner Manufacturing lends cash and accepts a $21,000 note receivable that offers 8% interest and is due in nine months. interest and is due in nine months. How would Turner record the year-end adjustment to accrue interest in 2012? (Round your answer to the nearest dollar amount.)

Explanation / Answer

Interest Receivable 700

Interest Revenue 700

(assuming year ends on 31st Dec 2012 so interest accrued for the period August 2012 to Dec 2012

21000 *8% * 5/12 = 700)

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