Jazz Company lends Sullivan Company $30,000 on August 1, 2019 in exchange of a 9-month, 12% interest note. If Jazz Company accrued interest on its December 31, 2019 year-end, what is the financial statement effect of the collection of the note and interest at its maturity date? Select one: a. BALANCE SHEET INCOME STATEMENT ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE Cash Interest Receivable Notes Receivable Retained Earnings Interest Income A) +32,700 -1,200 -30,000 +1,500 +1,500 b. BALANCE SHEET INCOME STATEMENT ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE Cash Interest Receivable Notes Receivable Retained Earnings Interest Income B) -32,700 +1,500 +30,000 -1,200 -1,200 c. BALANCE SHEET INCOME STATEMENT ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE Cash Interest Receivable Notes Receivable Retained Earnings Interest Income C) +32,700 -30,000 +2,700 +2,700 d. BALANCE SHEET INCOME STATEMENT ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE Cash Interest Receivable Notes Receivable Retained Earnings Interest Income D) +32,700 -1,500 -30,000 +1,200 +1,200 e. None of the above

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 12P

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Jazz Company lends Sullivan Company $30,000 on August 1, 2019 in exchange of a 9-month, 12% interest note. If Jazz Company accrued interest on its December 31, 2019 year-end, what is the financial statement effect of the collection of the note and interest at its maturity date?

Select one:

		BALANCE SHEET	INCOME STATEMENT
	ASSETS	=	LIABILITIES	+	STOCKHOLDER'S EQUITY	REVENUE	-	EXPENSE
	Cash	Interest Receivable	Notes Receivable				Retained Earnings	Interest Income
A)	+32,700	-1,200	-30,000				+1,500	+1,500

		BALANCE SHEET	INCOME STATEMENT
	ASSETS	=	LIABILITIES	+	STOCKHOLDER'S EQUITY	REVENUE	-	EXPENSE
	Cash	Interest Receivable	Notes Receivable				Retained Earnings	Interest Income
B)	-32,700	+1,500	+30,000				-1,200	-1,200

		BALANCE SHEET	INCOME STATEMENT
	ASSETS	=	LIABILITIES	+	STOCKHOLDER'S EQUITY	REVENUE	-	EXPENSE
	Cash	Interest Receivable	Notes Receivable				Retained Earnings	Interest Income
C)	+32,700		-30,000				+2,700	+2,700

		BALANCE SHEET	INCOME STATEMENT
	ASSETS	=	LIABILITIES	+	STOCKHOLDER'S EQUITY	REVENUE	-	EXPENSE
	Cash	Interest Receivable	Notes Receivable				Retained Earnings	Interest Income
D)	+32,700	-1,500	-30,000				+1,200	+1,200

e. None of the above

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