Leek Company receives a $12,000, 3-month, 5% promissory note from Rey Company in

Question

Leek Company receives a $12,000, 3-month, 5% promissory note from Rey Company in settlement of an open accounts receivable. What entry will Leek Company make upon receiving the note?

a. Notes receivable ............12,150

Accounts receivable-Rey Company.............12,150

b. Notes Receivable.............12,150

Accounts receivable-Rey Company............12,000

Interest Revenue.........................................150

c. Notes Receivable...............12,000

Interest Receivable.............150

Accounts Receivable-Rey Company.............12,000

Interest Revenue.............................................150

d. Notes Receivable..................12,000

Accounts Receivable-Rey Company.....................12,000

Explanation / Answer

Notes Receivable. 12000        Accounts Receivable-Rey Company 12000 Option D is correct

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