Billingsley Brothers earns 6% annual interest on its $50,000 of investments. Interest is paid every six months on June 30 and December 31.
a. If monthly financial statements are prepared, what adjustment should be made on January 31?
b. What effect does the adjustment have on the January 31 balance sheet?

Question

Billingsley Brothers earns 6% annual interest on its $50,000 of investments. Interest is paid every six months on June 30 and December 31. 
a. If monthly financial statements are prepared, what adjustment should be made on January 31?
b. What effect does the adjustment have on the January 31 balance sheet?

Quizplus · Accepted Answer

The Answer of Billingsley Brothers earns 6% annual interest on its $50,000 of investments. Interest is paid every six months on June 30 and December 31. 
a. If monthly financial statements are prepared, what adjustment should be made on January 31?
b. What effect does the adjustment have on the January 31 balance sheet?

Billingsley Brothers Earns 6% Annual Interest on Its $50,000 of Investments