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7 January, 00:17

Harper company lends hewell company $40,000 on march 1, accepting a four-month, 6% interest note. harper company prepares financial statements on march 31. what adjusting entry should be made before the financial statements can be prepared?

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  1. 7 January, 01:36
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    Given:

    march 1: loaned 40,000 to Hewell Company

    loan term, 4 months, 6% interest on note.

    On March 31, Harper Company should recognize the interest it will earn from the note of Hewell Company.

    40,000 x 6% = 2,400 this is the annual interest

    2,400 * 1/12 = 200 monthly interest

    March 31

    Debit Credit

    Interest receivable 200

    Interest Revenue 200
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