On January 31, 2011, Purrfect Pets Receives a $4,680 Interest

Multiple Choice

On January 31, 2011, Purrfect Pets receives a $4,680 interest payment on a note receivable representing two months of accumulated interest. One month of this interest accrued and was recorded during the year ended December 31, 2010. Upon receiving the payment, the company would:

A) debit Interest Receivable for $2,340, debit Cash $2,340, and credit Interest Revenue for $4,680.
B) debit Cash for $4,680, credit Interest Revenue for $2,340, and credit Interest Receivable for $2,340.
C) debit Cash for $2,340, debit Interest Receivable for $2,340, and credit Interest Revenue for $2,340.
D) debit Interest Revenue for $2,340 and credit Cash for $2,340.