Starr Corporation loaned $90,000 to another corporation on December 1, 2008 and received a 3-month, 8% interest-bearing note with a face value of $90,000. What adjusting entry should Starr make on December 31, 2008?
A) Debit Interest Receivable and credit Interest Revenue, $1,800
B) Debit Cash and credit Interest Revenue, $600
C) Debit Interest Receivable and credit Interest Revenue, $600
D) Debit Cash and credit Interest Receivable, $1,800

Question

Quizplus · Accepted Answer

1/12 × 8% × $90,000 = $600.

Starr Corporation Loaned $90,000 to Another Corporation on December 1