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24 January, 13:03

On August 1, 2021, Turner Manufacturing lends cash and accepts a $24,000 note receivable that offers 4% interest and is due in nine months. How would Turner record the year-end adjustment to accrue interest in 2021? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

A. Interest Revenue 476

Interest Receivable 476

B. Interest Receivable 960

Interest Revenue 960

C. Interest Receivable 476

Interest Revenue 476

D. Interest Receivable 400

Interest Revenue 400

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Answers (2)
  1. 24 January, 14:19
    0
    credit interest receivable200. debit interest revenue 200
  2. 24 January, 16:14
    0
    Note amount: $6,000

    Interest amount: 8%

    Months left in the year: 5

    To solve:

    Multiply the note amount by the percentage and the amount of months left out of the year.

    $6,000 x 8% x 5/12 = $200

    Journal Entry:

    Interest Receivable $200

    Interest Revenue $200
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