Question

On August 1, 2021, Turner Manufacturing lends cash and accepts a $17,000 note receivable that offers 2% interest and is due in nine months. How would Turner record the year-end adjustment to accrue interest in 2021

Answer 1

Answer:

850

Explanation:

Turners manufactring accepts $17,000 as receivable

The interest is 2%

The year adjustment can be calculated as follows

= 17,000×0.02×5/2

= 17,000×0.02×2.5

= 850