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Question - 1. On September 1, 1995, Dahlia Co. received a 6-month note from a customer amounting to 300,000 with a 10% interest. The entries made to record interest income on December 31, 1996:
Accrued interest receivable 5,000
Interest income 5,000
2. On September 1, 1995, Dahlia Co. received a 6-month note from a customer amounting to 300,000 with a 10% interest. The entries made to record interest income on December 31, 1996 are as follows:
Accrued interest receivable 30,000
Interest income 30,000
Prepare the adjusting entries at the end of the year of (1) and (2), assuming the nominal accounts are (a) still open, and (b) closed to capital account.
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