Question

Cider company purchased a 15-month, $50,000, 6% note on June 1, 2019. What is the journal entry for December 31, 2019?

A. Interest Income $1500

Interest receivables $1500

B. Interest Receivable: 1,500

interest income: 1,500

C. interest income: 1,750

interest receivable 1,750

D. interest receivable 1,750

interest income 1,750

On December 31, 2018, the payment on a $4,500, 120-day, 10% note dated November 1, 2018, will recognize: (please round to the nearest dollar and use 365 day year)

A. interest receivables $75

interest revenue: $75

B. Interest revenue: $75

interest receivable: $75

C. no entry needed

D. Interest Receivable: $148

interest revenue: $148

the LBG company is preparing its financial statements on December 31. During the year, they purchased IBM sock as a trading security for $20,000. on December 31, the market value of the stock is $8,000. The journal entry on December 31 will be:

A. Loss        $8000

       IBM stock        $8000

B. IBM stock $12,000

           loss                 $12,000

C. Loss          $12,000

           IBM stock          $12,000

D. no etry

The bank statement balance is $6450, and shows a service charge of $30, interest earned of $25, and a NSF check for $475. Deposits in transit total $1850; outstanding checks are $1125. what is the adjusted bank balance?

A. $5,920

B. $6,450

C. $6,755

D. $7,175

Answer 1

1.)	Account Titles	Debit $	Credit $
	Interest Receivable	1,750
	Interest Income		1,750
	(50,000 x 6% x 7/12 )
	Correct answer is option D.
2.)	Account Titles	Debit $	Credit $
	Interest Receivables	75
	Interest Income		75
	(4,500 x 10% x 61/365 )
	Correct answer is option A.
3.)	Account Titles	Debit $	Credit $
	Loss	12,000
	IBM Stock		12,000
	(20,000 - 8,000 )
	Correct answer is option C.
4.)	Adjusted Bank Balance
		Amount $
	Bank Statement balance	6,450
	Add: Deposit in Transit	1,850
	Less: Outstanding checks	1,125
	Adjusted Bank Balance	7,175
	Correct answer is option D.