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Ashland Community Bank lends $20,000 to a customer on October 1, 2019 for home remodeling....

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Accounting

Ashland Community Bank lends $20,000 to a customer on October 1, 2019 for home remodeling. The following information applies:

  • Ashland receives a note receivable from the customer.

  • The note has a face value of $20,000 and an interest rate of 6%.

  • All principal and accrued interest will be repaid on September 30, 2020.

  • Ashlands fiscal year end on December 31.

What is the correct adjusting journal entry on December 31, 2019?

Question 8 options:

Debit: Interest Expense $300

Credit: Interest Payable $300

Debit: Interest Receivable $300

Credit: Cash $300

Debit: Interest Receivable $300

Credit: Interest Revenue $300

Debit: Cash $300

Credit: Interest Revenue $300

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