Genuine Parts Received a Promissory Note from a Customer on March

question 98

Multiple Choice

Genuine Parts received a promissory note from a customer on March 1, 2016.The face amount of the note is $8,000; the terms are 90 days and 9% interest.At the maturity date, the customer pays the amount due for the note and interest.What entry is required on the books of Genuine Parts on the maturity date assuming none of the interest had already been recognized?

• A) Increase Cash, $8,000, and decrease Notes Receivable $8,000
• B) Increase Cash, $8,180, increase Interest Revenue, $180, and decrease Notes Receivable, $8,000
• C) Increase Cash $8,720, decrease Notes Receivable $8,000, and increase Interest Revenue, $720
• D) No entry is required; the customer pays the amount due to the bank

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