QUESTION 20 Gambit Stores accepts from Leonard Co. a $3,400, 90-day, 6% note dated May 10 in settlement of Leonard's overdue open account. The note matures on August 8. Which of the following statement is correct? O Note receivable is a liability account. O Interest payable at maturity date is $51 Note receivable has a normal credit balance The journal entry that Gambit makes at the maturity date, assuming Leonard pays the note and interest in full at that time: Notes Receivable 3,400 Interest Revenue 51 Cash 3,451

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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QUESTION 20
Gambit Stores accepts from Leonard Co. a $3,400, 90-day, 6% note dated May 10 in
settlement of Leonard's overdue open account. The note matures on August 8. Which of the
following statement is correct?
O Note receivable is a liability account.
Interest payable at maturity date is $51
Note receivable has a normal credit balance
The journal entry that Gambit makes at the maturity date, assuming Leonard pays the
note and interest in full at that time:
Notes Receivable
3,400
Interest Revenue
51
Cash
3,451
Transcribed Image Text:QUESTION 20 Gambit Stores accepts from Leonard Co. a $3,400, 90-day, 6% note dated May 10 in settlement of Leonard's overdue open account. The note matures on August 8. Which of the following statement is correct? O Note receivable is a liability account. Interest payable at maturity date is $51 Note receivable has a normal credit balance The journal entry that Gambit makes at the maturity date, assuming Leonard pays the note and interest in full at that time: Notes Receivable 3,400 Interest Revenue 51 Cash 3,451
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