On January 15, 2010, Raymond Company received a two-month, 9%, $5,000 note from

Question

On January 15, 2010, Raymond Company received a two-month, 9%, $5,000 note from William Pentel for the settlement of his open account. The entry by Raymond Company on March 15, 2010 if Pentel dishonors the note and collection is expected is:



Accounts Receivable-W. Pentel 5,000
Notes Receivable 5,000


Accounts Receivable-W. Pentel 4,925
Interest Lost 75
Notes Receivable 5,000


Bad Debts Expense 5,075
Notes Receivable 5,075


Accounts Receivable-W. Pentel 5,075
Notes Receivable 5,000
Interest Revenue 75

Explanation / Answer

Accounts Receivable-W. Pentel................5,075
Notes Receivable................................................. 5,000
Interest Revenue .................................................75

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