On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000 and a due date of December 31, 2017. The stated rate of interest is 5% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 10% is implicit in the agreed-upon price. The effective amortization method is used. Oxford's journal entry on 1/1/15 to record service revenue will include: Select one: O a. A credit to Notes Receivable for $600,000 Ob. A credit to Service Revenue for $600,000 OC A debit to Discount on Notes Receivable for $74,602 O d. A credit to Service Revenue for $525,398 O e A credit to Discount on Notes Receivable for $52,145

On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000 and a due date of December 31, 2017. The stated rate of interest is 5% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 10% is implicit in the agreed-upon price. The effective amortization method is used. Oxford's journal entry on 1/1/15 to record service revenue will include: Select one: O a. A credit to Notes Receivable for $600,000 Ob. A credit to Service Revenue for $600,000 OC A debit to Discount on Notes Receivable for $74,602 O d. A credit to Service Revenue for $525,398 O e A credit to Discount on Notes Receivable for $52,145

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000 and
a due date of December 31, 2017. The stated rate of interest is 5% with interest receivable at the end of each year through 12/31/17. Assume an
effective interest rate of 10% is implicit in the agreed-upon price. The effective amortization method is used.
Oxford's journal entry on 1/1/15 to record service revenue will include:
Select one:
O a. A credit to Notes Receivable for $600,000
Ob. A credit to Service Revenue for $600,000
OC A debit to Discount on Notes Receivable for $74,602
Od. A credit to Service Revenue for $525,398
O e A credit to Discount on Notes Receivable for $52,145

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