Warner Enterprises Was Unable to Collect a $1,000 Note Receivable

question 78

Multiple Choice

Warner Enterprises was unable to collect a $1,000 note receivable plus $60 interest on the maturity date,but hoped to collect the amount in the future.Warner should record this as:

• A)debit Bad Debts Expense $1,000; credit Notes Receivable $1,000.
• B)debit Allowance for Doubtful Accounts $1,060; credit Notes Receivable $1,060.
• C)debit Accounts Receivable $1,060; credit Interest Income $60; credit Notes Receivable $1,000.
• D)debit Accounts Receivable $1,000; debit Interest Income $60; credit Cash $1,060.