Uniform Supply Accepted a $4,800, 90-Day, 10% Note from Tracy

question 64

Multiple Choice

Uniform Supply accepted a $4,800, 90-day, 10% note from Tracy Janitorial on October 17. What entry should Uniform Supply make on January 15 of the next year when the note is paid, assuming interest was properly accrued at the previous December 31 year end?

• A)Debit Notes Receivable $4,800; debit Interest Receivable $120; credit Sales $4,920.
• B)Debit Cash $4,920; credit Notes Receivable $4,920.
• C)Debit Cash $4,920; credit Interest Revenue $100; credit Interest Receivable $20; credit Notes Receivable $4,800.
• D)Debit Cash $4,920; credit Interest Revenue $20; credit Interest Receivable $100; credit Notes Receivable $4,800.
• E)Debit Cash $4,920; credit Interest Revenue $120; credit Notes Receivable $4,800.

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