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Ashland Community Bank lends $20,000 to a customer on October 1, 2019 for home remodeling. The following information applies:
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Ashland receives a note receivable from the customer.
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The note has a face value of $20,000 and an interest rate of 6%.
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All principal and accrued interest will be repaid on September 30, 2020.
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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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