25. Fitz\'s journal entry to record the collection of the note plus accrued inte

Question

25. Fitz's journal entry to record the collection of the note plus accrued interest on December 1, will include a ________. A. credit Interest Revenue for $25,000 B. debit Note Receivable for $500,000 C. credit Note Receivable for $500,000 D. credit Interest Revenue for $50,000 On June 1, Fitz installed a $500,000 sound system for International Arena. Fitz agreed to accept a $500,000 six-month, 10% note due on December 1. Fitz prepares financial statements at the end of every calendar year. 25. Fitz's journal entry to record the collection of the note plus accrued interest on December 1, will include a ________. A. credit Interest Revenue for $25,000 B. debit Note Receivable for $500,000 C. credit Note Receivable for $500,000 D. credit Interest Revenue for $50,000 On June 1, Fitz installed a $500,000 sound system for International Arena. Fitz agreed to accept a $500,000 six-month, 10% note due on December 1. Fitz prepares financial statements at the end of every calendar year.

Explanation / Answer

The correct answer is Option C (credit Note Receivable for $500,000)

Reason: Fiz installed the sound system on 1 Dec,2016, so only entry of $500,000 will be there on first december

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