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On September 1, Kennedy Company loaned $115,000, at 12% annual interest, to a customer Interest and principal will be collect
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Answer #1

Answer:-

Kennedy company loaned $115000 on 1st September. So the accrued interest for 4 months is $4,600.

As accrued interest adjustment entry is to be made as at calendar year end December 31, the same would be as follows:-

Debit interest receivable $4,600 and credit Interest revenue $4,600.

Explanation:-

Interest receivable for 4 months is asset and hence it is to be debited and interest is revenue and hence it is to be credited.

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