When a note is accepted to settle an open account, Notes Receivable is debited for the note's

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When a note is accepted to settle an open account, the Notes Receivable account is debited for the face value of the note. The face value of the note is the amount written on the note that the maker promises to pay. The interest that will be earned on the note is recorded separately as interest revenue. The net realizable value of the note may be different from the face value if there are concerns about the maker's ability to pay or if the note has been discounted. The maturity value is the face value plus any interest that has accumulated at the maturity date, so it is not relevant when the note is accepted.

When a Note Is Accepted to Settle an Open Account