1. On December 31, 2008, YYY Company has the following balances on its balance sheet after all adjusting entries have been recorded: Note Receivable = $60,000 and Interest Receivable = $900.

The note receivable has an interest rate of 6% and is due to be collected with all the interest on February 28, 2009. The company only prepares financial statements at the end of each quarter, so the next scheduled financial statements will be prepared for the 3 months ended March 31, 2009.

Based on the journal entry on February 28, 2009 that is needed to record the full collection of the note receivable and interest.

A) By how much interest revenue will be credited:

a)$600

b)$900

c) $1500

d)$0

B) By how much interest receivable will be credited:

a)$600

b)$900

c) $1500

d)$0