Academy Grill Supply
On October 1, 2019, the company received a $50,000 promissory note from a customer. The annual interest rate is 6%. Principal and interest will be collected in cash at the maturity date of September 30, 2020.
-Refer to Academy Grill Supply. The effect on the company's financial statements on December 31, 2019 is as follows

Question

Quizplus · Accepted Answer

On December 31, 2019, there will be an increase in assets and stockholders' equity because the company's current asset (note receivable) will increase by $50,000, and the accrued interest (from October 1 to December 31) will increase the company's income and thus the retained earnings (and potentially dividends, if applicable), which will increase stockholders' equity. There will be no effect on liabilities.

Academy Grill Supply On October 1, 2019, the Company Received a $50,000 Promissory