If a 15%,two-Month Note Receivable Is Acquired from a Customer

question 145

Multiple Choice

If a 15%,two-month note receivable is acquired from a customer in settlement of an existing account receivable of $5,000,the accounting entry for acquisition of the note will:

• A)Include a debit to Notes Receivable for $5,750.
• B)Include a debit to Notes Receivable for $5,062.50.
• C)Include a credit to Interest Revenue for $62.50.
• D)Include a debit to Notes Receivable for $5,000 and no entry for interest.

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Definitions:

Renewable Resources

Those that are renewed in nature, like water flows, or grown, like timber.

Renewed

Pertains to something that has been restored, refreshed, or made new again.

Nature

The phenomena of the physical world collectively, including plants, animals, the landscape, and other features and products of the earth.

Water Supply Problems

Issues related to the availability, distribution, and quality of water resources.