Tamarisk, Inc. lends Nash's Trading Post, LLC $52800 on April 1, accepting a four-month, 12% interest note. Tamarisk, Inc. prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared? Note Receivable 52800 Cash 52800 Interest Receivable 528 Interest Revenue 528 Cash 528 Interest Revenue 528 Interest Receivable 1584 Interest Revenue 1584

Question

Business

Roderick Nunez

27 September, 05:12

Tamarisk, Inc. lends Nash's Trading Post, LLC $52800 on April 1, accepting a four-month, 12% interest note. Tamarisk, Inc. prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared? Note Receivable 52800 Cash 52800 Interest Receivable 528 Interest Revenue 528 Cash 528 Interest Revenue 528 Interest Receivable 1584 Interest Revenue 1584

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Rodney Salas · Answer 1

The adjusting entry that will be passed in the books of accounts in the Tamarisk inc will be Notes receivable 52800, cash 52800.

Explanation:

In the given question, Tamarisk, Inc., has lent an amount of $52800 to Nash's trading Post, LLC. The interest revenue is to be recognized at the preparation of the financial statements and at the year end when such interest is to be recognized as and when it becomes due. Thus, before the year ending, the adjusting entry that will be passed will be of notes received of such amount and the cash that has been given.