A $8,000, 30-day, 12% note dated November 15 is received from a customer to repl

Question

A $8,000, 30-day, 12% note dated November 15 is received from a customer to replace an account receivable. The journal entry to record this event is

debit Accounts Receivable, $6,060; credit Notes Receivable, $6,000; Credit Interest Revenue, $60

debit Notes Receivable, $8,000; credit Accounts Receivable, $8,000

debit Cash, $8,080 credit Notes Receivable, $8,080

spanspandebit Cash, $8,080 credit Notes Receivable, $8,080/span/span: Incorrect.

debit Accounts Receivable, $8,080; credit Notes Receivable, $8,000; Credit Interest Receivable, $80

Explanation / Answer

Journal entry to record the transaction

12% Notes receivable (Dr) $8,000

To Accounts Receivables (Cr) $8,000

(Being entry passed for exchange of notes for Accounts receivables)

ANS) debit Notes Receivable, $8,000; credit Accounts Receivable, $8,000 is correct

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