TCO B) Adjusting Entries: Data relating to the balances of various accounts affe
ID: 2502165 • Letter: T
Question
TCO B) Adjusting Entries: Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. Interest receivable at 1/1/1X was $5,000. During 201X cash received from debtors for interest on outstanding notes receivable amounted to $8,000. The 201X income statement showed interest revenue in the amount of $10,900. You are to provide the missing adjusting entry that must have been made, assuming reversing entries are not made. For each journal entry write Dr. for debit and Cr. for credit.
Explanation / Answer
Calculation of Year End Balance of Interest Receivable:
Opening Balance = 5,000
Add: Interest Revenue for the current Year = 10,900
Total = 15,900
Less: Cash received for interest = 8,000
Ending Interest Receivable = 7,900
Journal entry:
Date Account Title Debit Credit 31 Dec 201X Interest Receivable 7,900 Interest Revenue 7,900 (Recording of interest earned but not received)Related Questions
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