Homework Answers
Ans. Option 5th Debit cash $4,400; credit interest revenue $4,400
Explanation and calculation: For the receipt of interest, the interest revenue account is credited and cash account is debited for the collection of interest revenue.
Interest revenue = Bonds * Rate of interest * 6/12
= $80,000 * 11% * 6/12
= $4,400
*The interest is received semi-annually, so six months factor (6/12) is applied.
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