On January 15, 2014, Raymond Company received a two-month, 9%, $8,000 note from William Pentel for the settlement of his open account. The entry by Raymond Company on January 15, 2014 would include a:

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When Raymond Company receives the two-month, 9%, $8,000 note from William Pentel, it should debit $8,000 to Notes Receivable, representing the amount owed to Raymond Company by William Pentel. There is no need to credit Accounts Receivable since the account has already been settled by the issuance of the note. The note will be recorded as a separate asset on the balance sheet until it is either collected or sold. The additional interest will be recognized over the life of the note.

On January 15, 2014, Raymond Company Received a Two-Month, 9