On October 2, 2014, Allen Jewelry Company Accepted a 4-Month

question 115

Multiple Choice

On October 2, 2014, Allen Jewelry Company accepted a 4-month, 10% note for $2,400 in settlement of an overdue account receivable. What is the journal entry to record the acceptance of the note?

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Definitions:

LIBOR

The London Interbank Offered Rate, a benchmark interest rate at which major global banks lend to one another.

Money Markets

Financial markets for short-term borrowing and lending, typically dealing with assets that mature in less than one year.

Trillions

A numerical value representing one thousand billion, or 10^12, used in the context of large sums, such as government budgets or the global economy.

Brokers' Call Rate

The interest rate charged by banks to brokers for the money borrowed to fund their clients' margin accounts.