On December 1, 2021, a company converted an existing account receivable in the amount of $6,000 to a note receivable to allow an extended payment period. The note is due in three months and includes an annual interest rate of 9%. The company prepares year-end financial statements on December 31 and recorded adjusting entries at that time. What entry should the company make on March 1, 2022, when the interest is paid at maturity? Multiple Choice Debit Cash and credit Notes Receivable for $6,135. Debit Cash for $6,135, credit Notes Receivable for $6,000, and credit Interest Revenue for $135. Debit Cash for $135 and credit Interest Revenue for $135. О Debit Cash for $135, credit Interest Receivable for $45, and credit Interest Revenue for $90.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On December 1, 2021, a company converted an existing account receivable in the amount of $6,000 to a note
receivable to allow an extended payment period. The note is due in three months and includes an annual
interest rate of 9%. The company prepares year-end financial statements on December 31 and recorded
adjusting entries at that time. What entry should the company make on March 1, 2022, when the interest is paid
at maturity?
Multiple Choice
Debit Cash and credit Notes Receivable for $6,135.
Debit Cash for $6,135, credit Notes Receivable for $6,000, and credit Interest Revenue for
$135.
Debit Cash for $135 and credit Interest Revenue for $135.
О
Debit Cash for $135, credit Interest Receivable for $45, and credit Interest Revenue for $90.
Transcribed Image Text:On December 1, 2021, a company converted an existing account receivable in the amount of $6,000 to a note receivable to allow an extended payment period. The note is due in three months and includes an annual interest rate of 9%. The company prepares year-end financial statements on December 31 and recorded adjusting entries at that time. What entry should the company make on March 1, 2022, when the interest is paid at maturity? Multiple Choice Debit Cash and credit Notes Receivable for $6,135. Debit Cash for $6,135, credit Notes Receivable for $6,000, and credit Interest Revenue for $135. Debit Cash for $135 and credit Interest Revenue for $135. О Debit Cash for $135, credit Interest Receivable for $45, and credit Interest Revenue for $90.
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