When a note receivable is dishonored
A) interest revenue is never recorded.
B) bad debts expense is recorded.
C) the maturity value of the note is written off.
D) Accounts Receivable is debited if eventual collection is expected.

Question

Quizplus · Accepted Answer

When a note receivable is dishonored and the company expects eventual collection, the amount is transferred back to Accounts Receivable. This reflects the company's expectation to collect the amount in the future, despite the initial dishonor of the note.

When a Note Receivable Is Dishonored