A company receives interest on a $30,000, 8%, 5-year note receivable each April 1. At December 31, 2007, the following adjusting entry was made to accrue interest receivable:

-Assuming that the company does not use reversing entries, what entry should be made on April 1, 2008 when the annual interest payment is received?

Question

A company receives interest on a $30,000, 8%, 5-year note receivable each April 1. At December 31, 2007, the following adjusting entry was made to accrue interest receivable:
 
-Assuming that the company does not use reversing entries, what entry should be made on April 1, 2008 when the annual interest payment is received?

Quizplus · Accepted Answer

$30,000 × 8% = $2,400

A Company Receives Interest on a $30,000, 8%, 5-Year Note