Question
Sandlot Inc. lends Dobby Company $15,000 in cash on May 1, 2012, accepting an 11-month, 3% (annual) interest note. Dobby will repay the principal and
Sandlot Inc. lends Dobby Company $15,000 in cash on May 1, 2012, accepting an 11-month, 3% (annual) interest note. Dobby will repay the principal and all interest at the maturity date of the note.
If Sandlot correctly recorded all adjusting entries at its December 31, 2012 year-end, which of the following would be part of the journal entry it must make to record the collection of the note and all interest at its maturity date?
Number of Days in Each Month:
January: 31
February: 28 (for the purposes of this class)
March: 31
April: 30
May: 31
June: 30
July: 31
August: 31
September: 30
October: 31
November: 30
December: 31
| CREDIT to Interest Revenue for $300 | ||
| DEBIT to Note Payable for $15,000 | ||
| CREDIT to Interest Payable for $112.50 | ||
| DEBIT to Cash for $15,000 | ||
| None of the answer choices given | ||
| CREDIT to Interest Receivable for $300 | ||
| DEBIT to Interest Receivable for $112.50 |
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Principles of Auditing and Other Assurance Services
Authors: Ray Whittington, Kurt Pany
19th edition
978-0077804770, 78025613, 77804775, 978-0078025617
