Comfort Shoes received a promissory note from a customer on April 1,2017.The face amount of the note is $2,000;the terms are 12 months and 8% annual interest.At the maturity date,the customer pays for the note and interest.Comfort Shoes made the proper adjustment at the end of December for interest.The effect of recognizing the transaction on the maturity date is a(n)

Question

Quizplus · Accepted Answer

On the maturity date, when the customer pays the note and interest, Comfort Shoes would record the receipt of cash, which decreases the Notes Receivable account (as the note is paid off), hence the correct answer is a decrease to Notes Receivable.

Comfort Shoes Received a Promissory Note from a Customer on April