On January 15, 2010, Raymond Company received a two-month, 9%, $5,000 note from William Pentel for the settlement of his open account. The entry by Raymond Company on January 15, 2010 would include a:

Question

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When a note is received, the amount of the note is recorded as a debit to Notes Receivable. The amount of the open account that is being settled is already recorded as a debit to Accounts Receivable. Therefore, no credit is necessary at this point. The interest that will be earned on the note is not recorded until the end of the interest period, so a credit for interest is not necessary at this point either.

On January 15, 2010, Raymond Company Received a Two-Month, 9