FINANCIAL+MANAG.ACCT.
FINANCIAL+MANAG.ACCT.
9th Edition
ISBN: 9781260728774
Author: Wild
Publisher: RENT MCG
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Chapter 7, Problem 21E
To determine

Concept Introduction:

Dishonoring of Note: When a promissory note is not paid by a debtor in the stated amount of time due to which the creditor must write off the income as bad debt is stated as dishonoring of note. To record the dishonoring of notes in the accounting books, the company transfers the principal and interest to the accounts receivable. The company removes face value from notes receivable and realizes the amount of interest revenue.

To prepare: The journal entry for the dishonoring note.

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