Buyer Company Asks to Extend Its Past Due $600 Account

question 131

Multiple Choice

Buyer Company asks to extend its past due $600 account payable to Seller Company. Seller Company agrees to accept $100 cash and a 60-day, 12%, $500 note payable to replace the account payable. How does Buyer Company record this event in the general journal?

• A) \(\begin{array}{|l|r|r|}
• \hline \text { Accounts Payable } & 600 & \\
• \hline \text { Cash } & & 100 \\
• \hline \text { Notes Payable } & & 500 \\
• \hline
• \end{array}\) 00 Notes Payableompany record this event in the general journal?
• B) \(\begin{array}{|l|r|l|}
• \hline \text { Notes Payable } & 500 & \\
• \hline \text { Cash } & 100 & \\
• \hline \text { Accounts Payable } & & 600 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|r|}
• \hline \text { Cash } & 100 & \\
• \hline \text { Accounts Payable } & & 100 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|c|r|r|}
• \hline \text { Accounts Payable } & 100 & \\
• \hline \text { Cash } & & 100 \\
• \hline
• \end{array}\)
• E) Buyer Company has no entry to record for this transaction.

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Definitions:

Assembly Lines

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Test Statistic

A value calculated from sample data during a hypothesis test used to determine whether to reject the null hypothesis.

Critical Value

A threshold value that defines the boundary of the rejection region in hypothesis testing, beyond which the null hypothesis is rejected.

Thalamus

A brain structure acting as a relay station for sensory information, excluding the sense of smell, to the cerebral cortex.