What Is the Adjustment to Interest Income on December 31

question 25

Multiple Choice

What is the adjustment to Interest Income on December 31 if Pristine Company (the holder of the note) receives a $26,000, 90-day, 7% note on December 10th from Elegant Company (debtor) ? (Use a 360-day year. Do not round any intermediate calculations. Round your final answer to the nearest dollar.)

• A) $455
• B) $1,820
• C) $111
• D) $106

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Definitions:

Investing Activities Section

Part of a company's cash flow statement that shows the cash spent on and received from investment activities, including purchases and sales of securities.

Book Value

The net value of an asset according to its balance sheet account balance, taking into account depreciation, amortization, or impairment costs.

Loss

A financial term referring to when expenses exceed revenues in a specific period, indicating a negative profitability.

Net Cash

The amount of cash available after accounting for cash inflows and outflows. It represents a company's liquid assets.