Springz Company Received a 120-Day, 9 Percent Note for $1,200

question 24

Multiple Choice

Springz Company received a 120-day, 9 percent note for $1,200, dated March 18, from Jenny, a charge customer, to satisfy his open account receivable. Which of the following journal entries records the receipt of the note in the general journal of Springz Company?

• A) Debit Notes Receivable by $1,236; credit Accounts Receivable, Jenny by $1,200, Interest Income by $36
• B) Debit Cash by $1,200; credit Accounts Receivable, Jenny by $1,200
• C) Debit Notes Receivable by $1,200; credit Accounts Receivable, Jenny by $1,200
• D) Debit Notes Receivable by $1,164; credit Accounts Receivable, Jenny by $1,164

---

Definitions:

Profitability

The ability of a business to earn a profit, which occurs when the revenues generated exceed the costs and expenses incurred in operating the business.

Financial Indicators

Financial indicators are quantitative measures that provide insights into the financial health, performance, and stability of an organization or business.

Accountability

The obligation of an individual or organization to account for its activities, accept responsibility for them, and disclose the results in a transparent manner.

Regulatory Compliance

Adhering to laws, regulations, guidelines, and specifications relevant to business operations or activities.