Question
Assume Cain lends $1,000 to Abel and takes back a Note which matures in 1 year and the borrowing rate is 4% per annum. Multiple
Assume Cain lends $1,000 to Abel and takes back a Note which matures in 1 year and the borrowing rate is 4% per annum.
Multiple Choice
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If Cain prepares financial statements prior to the maturity date of the note, he will have to make an adjusting entry to set up the interest expense incurred
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None of the other statements are correct
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If the note is paid on maturity then Abel will record $40 in interest income
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If the note is dishonoured on maturity then Abel will set up a receivable for more than $1,000
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If the note is paid on maturity then Abel will record $40 in interest expense
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