Answer:
C. Interest Receivable 200Interest Revenue 200
Explanation:
It will need to adjust for the interest accrued during the month
the 6% is an annual rate, we will convert to a monthly rate by dividing by the 12 month of the year:
6% = 6/100 0 0.06 annual rate
0.06/12 = 0.005 = 0.5% monthly rate
Now we calcualte the interest
40,000 x 0.5% = 200
The company is not receiving this interest. It is just delcaring that has been accrued and generate an earning for the period, but it won't be collected until maturity.
