Harper company lends hewell company $40,000 on march 1, accepting a four-month, 6% interest note. harper company prepares financial statements on march 31. what adjusting entry should be made before the financial statements can be prepared? a. cash 200interest revenue 200b. interest receivable 800interest revenue 800c. interest receivable 200interest revenue 200d. note receivable 40,000cash 40,000

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.

b. condominum i think