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Problem 1: Honeycomb Company issued a note receivable to a customer on October 1. The face value of the note was $20,000 at 5% interest for 7 months. What is the accrued interest journal entry for Honeycomb assuming their fiscal year is December 31?
Option 1: Debit: Interest Receivable $583.33; Credit: Interest Income $583.33Option 2: Debit: Interest Income $250; Credit: Interest Receivable $250Option 3: Debit: Interest Receivable $250; Credit: Interest Income $250Option 4: Debit: Interest Receivable $1,000; Credit: Interest Income $1,000
Financial Statement Analysis and Preparation
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