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. notes receivable 40,000; cash 40,000
b. interest receivable 800; interest revenue 800
c. interest receivable 200; interest revenue 200
d. cash 200; interest revenue 200

Option (c) is correct.

Explanation:

Given that,

Harper Company lends Hewell Company = $40,000

on March 1,

Accepting a four-month, 6% interest note.

The adjusting entry by the company would be related to interest for 1 month in the month of march:

Interest accrued would be:

= $200

Therefore entry for interest receivable would be:

Interest Receivable A/c   Dr.    $200

To Interest revenue                              $200

where is the graph?