Teller Purchased Merchandise from TechCom on October 17 of the Current

question 21

Multiple Choice

Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller's $4,800, 90-day, 10% note. What entry should TechCom make on December 31, to record the accrued interest on the note?

• A) Debit Cash $20; credit Notes Receivable $20.
• B) Debit Cash $100; credit Notes Receivable $100.
• C) Debit Interest Receivable $20; credit Interest Revenue $20.
• D) Debit Interest Receivable $100; credit Interest Revenue $100.
• E) Debit Cash $120; credit Interest Revenue $100; credit Interest Receivable $20.

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Definitions:

Merchandise

Products or goods that a company holds for the purpose of selling to customers.

Terms

The conditions and stipulations outlined in an agreement or contract, specifying the obligations, rights, and responsibilities of each party involved.

Cost

Refers to the amount of money incurred to produce or purchase goods or services.

Defective Motor

A motor that fails to operate within its specified performance criteria due to faults in design, material, or workmanship.