If a 5%,four-Month Note Receivable Is Acquired from a Customer

question 4

Multiple Choice

If a 5%,four-month note receivable is acquired from a customer in settlement of an existing account receivable of $50,000,the accounting entry for acquisition of the note will:

• A)Include a debit to Notes Receivable for $50,822.
• B)Include a debit to Notes Receivable for $50,208.
• C)Include a credit to Interest Revenue for $822.
• D)Include a debit to Notes Receivable for $50,000 and no entry for interest.

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