41. A company receives interest on a $90,000, 8%, 5-year note receivable each April 1. At...

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41. A company receives interest on a $90,000, 8%, 5-year note receivable each April 1. At December 31, 2020, the following ad

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Answer 1

Answer #1

41.

Since no reversing entry hasbeen made on April 1, 2021, hence, when cash is received for interest, the following journal will be made :

Journal

Date	Account Title and Explanation	Debit	Credit
Apr 1, 2021	Cash	7,200
	Interest receivable		5,400
	Interest revenue		1,800

Interest revenue on apr 1, 2021 = Note receivable x Interest rate x 3/12

= 90,000 x 8% x 3/12

= $1,800

Correct option is (C)

42.

Rent revenue for 1 year = $75,000

Rent revenue for 8 months (From may to Dec 2020) = 75,000 x 8/12

= $50,000

the following journal will be made on Dec 31, 2020 :

Journal

Date	Account Title and Explanation	Debit	Credit
Dec 31, 2020	Unearned rent revenue	50,000
	Revenue revenue		50,000

Correct option is (D)

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Answer 2

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