For the current year, a business has earned (but not recorded or received) $200 of interest from investments. Demonstrate the required adjusting entry by completing the following sentence. The required adjusting entry would be to debit the

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Mathematics

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21 January, 16:07

For the current year, a business has earned (but not recorded or received) $200 of interest from investments. Demonstrate the required adjusting entry by completing the following sentence. The required adjusting entry would be to debit the

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Cadence Rice · Answer 1

The required adjusting entry would be to debit the accounts receivable by $200.

Step-by-step explanation:

The question says that the business has earned $200 but have not received it yet.

The business has to 'receive' the payment in the future.

The party who needs to send this payment is liable to pay them $200 in the future.

Businesses record this as 'accounts receivable' to keep a record of who owes them money and 'account payable' is recorded when the business owes someone money.

Therefore, the required adjusting entry would be to debit the accounts receivable by $200.