What Is the Holder of the Note's Entry to Record

question 31

Multiple Choice

What is the holder of the note's entry to record the proceeds of a note received, with interest accrued in the previous year (assume there is no reversing entry) ?

• A) Debit Cash; credit Interest Receivable; credit Notes Receivable; credit Interest Income
• B) Debit Notes Payable; debit Interest Expense; debit Interest Payable; credit Cash
• C) Debit Cash; debit Interest Expense; credit Notes Payable
• D) Debit Notes Receivable; debit Interest Income; credit Cash

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Definitions:

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the party to be charged, to be enforceable.

Writing

The act or process of composing text for various purposes, such as communication, expression, or documentation.

Foolish Bargain

An agreement made where one or more parties make poor decisions or agree to terms that are not in their best interest.

Statute of Frauds

A legal principle that requires certain contracts to be in writing and signed by the party to be charged, to be enforceable.