Leland Corp. has a note receivable from Jewel Co for $50,000. The note matures in 2 years and bears interest of 3%. Leland is preparing financial statements for the quarter ending June 30. Leland should make an adjusting entry:
A) Debiting Interest Revenue for $375 and crediting Interest Receivable for $375.
B) Debiting Interest Receivable for $375 and crediting Interest Revenue for $375.
C) Debiting Interest Revenue for $1,500 and crediting Interest Receivable for $1,500.
D) Crediting Interest Payable for $375 and debiting Interest Expense for $375.
Correct Answer:
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