On November 6, an 8%, 90-Day, $3,000 Note Was Accepted

question 17

Multiple Choice

On November 6, an 8%, 90-day, $3,000 note was accepted by Carmen in exchange for merchandise. What entry does Carmen make on December 31 to recognize the interest? (Use a 360-day year. Do not round any intermediate calculations. Round your final answer to the nearest cent.)

• A) Debit Interest income; credit Interest Receivable for $36.67
• B) Debit Interest Receivable; credit Interest Income for $36.67
• C) Debit Interest Receivable; credit Interest Income for $240.00
• D) None of these answers is correct.