CALCULATOR PRINTER VERSION BACK NEXT Multiple Choice Questio

CALCULATOR PRINTER VERSION BACK NEXT Multiple Choice Question 167 Blossom Company lends Vaughn Manufacturing S61200 on Apri 1, accepting a four month, 6% interest note. Blossom Company prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared? O Interest Receivable 918 Interest Revenue 918 O Note Receivable 61200 Cash 61200 O Interest Receivable 306 Interest Revenue 306 Cash 306 Interest Revenue 306 Click if you would like to Show Work for this question: een Show Work Question Attempts: O of 1 used SAVE FOR LATER

Solution

A

Amount of interest for 1 month = (61200 * 6%)/12 = 306

Interest amount is received after 4 months, but 1 month interest amount need to be due

Hence journal entry :-

Interest Receivable Dr   306

         Interest Revenue Cr    306