Interest Earned and Receivable on a Note Receivable Equals $50

question 160

Multiple Choice

Interest earned and receivable on a note receivable equals $50 for the month of March.What adjusting entry,if any,should be recorded as of March 31?

• A) Debit Cash $50 and credit Interest Revenue $50.
• B) Debit Interest Receivable $50 and credit Interest Revenue $50.
• C) Debit Interest Receivable for $150 and credit Interest Revenue $150.
• D) No journal entry is needed at this time.

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Definitions:

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations and external investment sources.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded by the end of the accounting period.

Adjusting Entry

An accounting entry made at the end of an accounting period to record earnings or expenses that have occurred but are not yet entered in the accounts.