Solution-What the entity should report in statement of

What the entity should report in statement of financial

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Reference no: EM132813405

Problem 1: On August 15 of the current year, an entity sold goods for which it received a note bearing the market rate of interest on that date. The four-month note was dated July 15 of the current year. Note principal, together with all interest, is due November 15 of the current year. When the note was recorded on August 15, which of the following accounts increased?

a. Unearned discount

b. Interest receivable

c. Prepaid interest

d. Interest revenue

Problem 2: On July 1 of the current year, an entity received a one-year note receivable bearing interest at the market rate. The face amount of the note receivable and the entire amount of the interest are due on June 30 of next year. On December 31 of the current year, the entity should report in its statement of financial position

a. A deferred credit for interest applicable to next year

b. No interest receivable

c. Interest receivable for the entire amount of the interest due on June 30 of next year

d. Interest receivable for the interest accruing this year

Reference no: EM132813405

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What the entity should report in statement of financial

Reference no: EM132813405

Reference no: EM132813405

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