On December 1,2018,a Company Converted an Existing Account Receivable in the Amount

question 148

Multiple Choice

On December 1,2018,a company converted an existing account receivable in the amount of $6,000 to a note receivable to allow an extended payment period.The note is due in three months and includes an annual interest rate of 9%.The company prepares year-end financial statements on December 31 and recorded adjusting entries at that time.What entry should the company make on March 1,2019,when the interest is paid at maturity?

• A)Debit Cash and credit Notes Receivable for $6,135.
• B)Debit Cash for $6,135,credit Notes Receivable for $6,000,and credit Interest Revenue for $135.
• C)Debit Cash for $135 and credit Interest Revenue for $135.
• D)Debit Cash for $135,credit Interest Receivable for $45,and credit Interest Revenue for $90.

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Definitions:

Inherent Quality

A characteristic or attribute that is a natural, essential part of something or someone.

Deviance

Behaviors or actions that violate societal norms or expectations, often leading to social sanction or stigma.

Social Stigma

The disapproval of, or discrimination against, individuals or groups based on perceivable social characteristics that serve to distinguish them from other members of society.

Atypicality

The characteristic of being unusual or not conforming to standard norms.