Randie Company Lends Luann Company $10,000 on April 1, Accepting $\begin{array}{lrr} \text { Note Receivable} &10,000\\ \text { Cash} &&10,000\\\end{array}$

question 131

Short Answer

Randie Company lends Luann Company $10,000 on April 1, accepting a four-month, 6% interest note. Randie Company prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared? a.
$\begin{array}{lrr} \text { Note Receivable} &10,000\\ \text { Cash} &&10,000\\\end{array}$

b.
$\begin{array}{lrr} \text {Interest Receivable } &50\\ \text {Interest Revenue } &&50\\\end{array}$

c.
$\begin{array}{lrr} \text { Cash} &50\\ \text { Interest Revenue } &&50\\\end{array}$

d.
$\begin{array}{lrr} \text {Interest Receivable } &200\\ \text { Interest Revenue } &&200\\\end{array}$

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Definitions:

Spreading Activation

A model of how information is retrieved in the brain, suggesting that spreading activation from one concept in a network triggers the retrieval of related concepts.

Discriminative Stimulus

A stimulus in the presence of which a particular response is reinforced, helping to differentiate it from other stimuli where the response would not be reinforced.

Operant Conditioning

A learning process in which the likelihood of a behavior is increased or decreased through reinforcement or punishment.

Reinforcement

A process in behavioral psychology that increases the likelihood of a behavior being repeated, through positive or negative stimuli.