For the current year, a business has earned (but not recorded or received) $200 of interest from investments. Demonstrate the required adjusting entry by completing the following sentence. The required adjusting entry would be to debit the

Question

Mathematics

Baron Newman

18 September, 01:55

For the current year, a business has earned (but not recorded or received) $200 of interest from investments. Demonstrate the required adjusting entry by completing the following sentence. The required adjusting entry would be to debit the

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Susan Mcconnell · Answer 1

The required adjusting entry would be to debit the accounts receivable by $200.

Step-by-step explanation:

The question says that the business has earned $200 but have not received it yet.

The business has to 'receive' the payment in the future.

The party who needs to send this payment is liable to pay them $200 in the future.

Businesses record this as 'accounts receivable' to keep a record of who owes them money and 'account payable' is recorded when the business owes someone money.

Therefore, the required adjusting entry would be to debit the accounts receivable by $200.