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sarachristene1777
05.05.2020 •
Business
When interest is accrued on an interest-bearing note receivable, the Interest Revenue account is Select one: a. Increased; the Interest Receivable account is increased b. None of the above c. Decreased; the Interest Receivable account is increased d. Increased; the Notes Receivable account is decreased e. Increased; the Notes Receivable account is increased
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Ответ:
The correct answer is Option A.
Explanation:
Note is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.
Interest revenue on the note is calculated as: Principal x Interest Rate x Time
So, when the interest is accrued, the required journals would be:
Debit Interest receivable XXX
Credit Interest revenue XXX
(Interest accrual on notes receivable)
The debit and credit to the corresponding accounts mean an increase.
Ответ: