Tamarisk, Inc. receives a $10500, 3-month, 8% promissory note from Nash\'s Tradi
ID: 2488619 • Letter: T
Question
Tamarisk, Inc. receives a $10500, 3-month, 8% promissory note from Nash's Trading Post, LLC in settlement of an open accounts receivable. What entry will Tamarisk, Inc. make upon receiving the note?
A.Notes Receivable 10500
Accounts Receivable-Nash's Trading Post, LLC 10500
B.Notes Receivable 10500
Interest Receivable 210
Accounts Receivable-Nash's Trading Post, LLC 10500
Interest Revenue 210
C.Notes Receivable 10710
Accounts Receivable-Nash's Trading Post, LLC 10710
D.Notes Receivable 10710
Accounts Receivable-Nash's Trading Post, LLC 10500
Interest Revenue 210
Explanation / Answer
A.Notes Receivable 10500
Accounts Receivable-Nash's Trading Post, LLC 10500
The promissory note is recorded with the principal amount which is $10500. Interest is recorded when it become receivable at the end of term so it not recorded in startting as it is not receivable at that point of time.
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