On August 1,2013,Ace Corporation Accepted a Note Receivable in Place $$\begin{array} { | l | r | r | } \hline \text { Cash } & 123,965.00 & \\\hline \text { Notes Receivable } & & 123,965.00 \\\hline\end{array}$$

question 70

Multiple Choice

On August 1,2013,Ace Corporation accepted a note receivable in place of an outstanding accounts receivable in the amount of $123,965.The note is due in 90 days and has an interest rate of 8%.What would be the appropriate journal entry to record the receipt of cash at the maturity date?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 123,965.00 & \\
• \hline \text { Notes Receivable } & & 123,965.00 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Notes Receivable } & 123,965.00 & \\
• \hline \text { Accounts Receivable } & & 123,965.00 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Notes Receivable } & 123,965.00 & \\
• \hline \text { Interest Revernue } & 2,479.30 & \\
• \hline \text { Cash } & & 126,444.30 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 123,965.00 & \\
• \hline \text { Interest Receivable } & 2,479.30 & \\
• \hline \text { Notes Receivable } & & 126,444.30 \\
• \hline
• \end{array}\]
• E) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 126,444.30 & \\
• \hline \text { Interest Revenue } & & 2,479.30 \\
• \hline \text { Notes Receivable } & & 123,965.00 \\
• \hline
• \end{array}\]

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Definitions:

Stocks

Shares of ownership in a corporation, representing a claim on part of the corporation's assets and earnings.

Commodity Contracts

Commodity contracts are legally binding agreements for the purchase or sale of physical goods or raw materials at a predetermined price and future date.

Buyer

A buyer is a person or entity that purchases goods or services from a seller in exchange for money or other consideration.

Ordinary Course

Activities that are considered normal, customary, or usual for a business under certain conditions.