Salem's balance sheet at December 31,2017,includes which of the following as a result of the sale of land on November 1?
A)Notes Receivable of $900,000 and Interest Receivable of $9,000.
B)Notes Receivable of $927,000 and Interest Receivable of $9,000.
C)Notes Receivable of $900,000 and Interest Receivable of $27,000.
D)Notes Receivable of $900,000 only.

Question

Quizplus · Accepted Answer

The correct answer involves recognizing the sale of land as generating a note receivable for the principal amount (in this case, $900,000) and an interest receivable for the interest accrued from the sale date to the balance sheet date. The interest receivable of $9,000 indicates that interest has been calculated and recognized as receivable by the year-end.

Salem's Balance Sheet at December 31,2017,includes Which of the Following