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

Question 120

Multiple Choice

Academy Grill Supply
On October 1, Year 1, 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, 2013.
-Refer to the figure Academy Grill Supply.If the company's year ends on September 31,Year 2,which of the following adjusting entries is needed?


A) increase interest revenue by $2,250
B) increase notes receivable by $750
C) increase interest receivable by $750
D) increase notes receivable by $2,250

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