Tan Traders Is Owed $350 Interest on an Investment Which

question 38

Multiple Choice

Tan Traders is owed $350 interest on an investment which has not been received by 3l December 2014, the last day of the accounting year. The adjusting entry is which of the following?

• A) Debit bank $350; credit interest income $350
• B) Debit accounts receivable $350; credit interest income $350
• C) Debit interest income $350; credit accounts receivable $350
• D) Debit interest income $350; credit accrued interest $350

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Definitions:

Market Value

The current quoted price at which an asset or service can be bought or sold in a marketplace.

Debt Securities

Financial instruments representing money owed by the issuer to the holder, typically in the form of bonds, bills, or notes.

Held-To-Maturity

Financial assets with fixed maturities that a company has the positive intention and ability to hold until maturity.

Debt Instrument

A debt instrument is a document or contract representing a loan made by an investor to a borrower, specifying terms of repayment and interest.