At the End of the First Quarter,which One of the Following

question 136

Multiple Choice

At the end of the first quarter,which one of the following entries will be made to record the interest earned by Palmer on the Berg note?

• A) DR Cash\(\quad\)2,500
• CR Interest income\(\quad\)2,500
• B) DR Accrued interest receivable\(\quad\)2,500
• CR Interest income\(\quad\)2,500
• C) DR Notes receivable-Berg\(\quad\)2,265
• CR Interest income\(\quad\)2,265
• D)There is no entry because the note is non-interest bearing.

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Definitions:

Straight-Line Depreciation

A process for dividing the expenditure of a tangible resource into consistent annual portions throughout its service life.

Journal Entries

Records of financial transactions in the accounting system in chronological order.

Depletion Rate

The rate at which natural resources, such as minerals or timber, are consumed or utilized, often used in calculating depreciation for accounting purposes.

Depletion Expense

A depletion expense is an accounting approach to allocate the cost of naturally occurring resources, such as minerals, oil, or timber, over their productive life as they are consumed or sold.