A customer charges a treadmill at Mike's Sport Shop. The price is $2,000 and the financing charge is 9% per an?

(a) and (b) are incorrect because no cash has been exchanged. (c) is incorrect because because a credit to interest payable represents a liability to the business, and there is none. So the correct answer is (d). The credit to Interest Revenue shows that that the interest for the first month has been earned. The debit to Accounts Receivable shows that the money is owed but has not been received.