On January 1,a Company Lends $90,000 to a Customer for One

Multiple Choice

On January 1,a company lends $90,000 to a customer for one year at a 7% annual interest rate.The note requires the payment of interest twice each year on June 30 and December 31.The company records adjusting entries on a monthly basis.At the end of each month in which the company does not receive any interest payments,the company:

A) records an entry with a debit to Cash of $525 and a credit to Interest Revenue of $525.
B) records an entry with a debit to Notes Receivable of $525 and a credit to Cash of $525.
C) records an entry with a debit to Interest Receivable of $525 and a credit to Interest Revenue of $525.
D) does not record an adjusting entry,since no transaction has occurred.