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Question - A company receives interest on a $103000, 7%, 5-year note receivable each April 1. At December 31, 2017, the following adjusting entry was made to accrue interest receivable:
Interest Receivable 5150
Interest Revenue 5150
Assuming that the company does use reversing entries, what entry should be made on April 1, 2018 when the annual interest payment is received?
a) Cash 7210 (dr)
Interest Receivable 5150 (cr)
Interest Revenue 2060(cr)
b) Cash 7210 (dr)
Interest Revenue 7210 (cr)
c) Cash 5150 (dr)
d) Cash 2060 (dr)
Interest Revenue 2060 (cr)
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