On August 1,2010,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 133

Multiple Choice

On August 1,2010,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)
• \[\begin{array} { | l | r | r | }
• \hline \text { Notes Receivable } & 123,965.00 & \\
• \hline \text { Interest Revenue } & 2,479.30 & \\
• \hline \text { Cash } & & 126,444.30 \\
• \hline
• \end{array}\]
• 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)
• \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 126,444.30 & \\
• \hline \text { Interest Receivable } & & 2,479.30 \\
• \hline \text { Notes Receivable } & & 123,965.00 \\
• \hline
• \end{array}\]

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Definitions:

Negative Income Tax

A program where the government provides additional income to those who earn under a specific threshold, rather than collecting taxes from them.

Tax Liability

Tax liability is the total amount of tax that an individual or organization is legally obligated to pay to a taxing authority based on earnings, property ownership, or other taxable conditions.

Earned Income Tax Credit

A tax credit in the United States designed to benefit individuals and families with low to moderate incomes, effectively reducing the amount of tax owed and possibly resulting in a refund.

Minimum-Wage Laws

Legislation that sets the lowest hourly wage rate that an employer can legally pay their workers.