Antler Company holds a $10,000 note receivable as an investment. Each month Antler earns $100 of interest revenue on the note. At the end of the accounting period, Antler needs to record the accrued revenue on the note for three months that it will receive next year. The amount of the adjusting journal entry would be:

Question

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The accrued revenue for three months that Antler will receive next year will be $300 ($100 per month x 3 months). Therefore, the adjusting journal entry should be a credit to Interest Revenue for $300 and a debit to Accrued Interest Receivable for $300. Option C is the correct choice.

Antler Company Holds a $10,000 Note Receivable as an Investment