On July 9, Mifflin Company receives a $9,500, 90-day, 12% note from customer Pay

Question

On July 9, Mifflin Company receives a $9,500, 90-day, 12% note from customer Payton Summers as payment on account. What entry should be made on July 9 to record receipt of the note?

Debit Notes Receivable $9,500; credit Accounts Receivable $9,500.

Debit Notes Receivable $9,785; credit Sales $9,785.

Debit Accounts Receivable $9,500; credit Sales $9,500.

Debit Notes Receivable $9,877; credit Interest Revenue $377; credit Accounts Receivable $9,500.

Debit Notes Receivable $9,500; credit Sales $9,500.

Explanation / Answer

Debit Notes Receivable $9,877; credit Interest Revenue $377; credit Accounts Receivable $9,500

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