On January 15 2016 Jaymes Company received a two-month 4% $7000 note from Peter Long for the settlement of his open account. The entry by Jaymes Company on January 15 2016 would include a:

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The entry by Jaymes Company on January 15 2016 would involve the recognition of a promissory note receivable of $7000 (the principal amount), so the correct entry would be a debit to Notes Receivable for $7000. The 4% interest is not recognized until the note is due and paid, so it is not part of the initial entry. The credit to Accounts Receivable would have been appropriate if Peter had paid off the open balance directly, but since he provided a promissory note instead, the credit should be to Notes Receivable.

On January 15 2016 Jaymes Company Received a Two-Month 4