Academy Grill Supply On October 1,2012,the company received a $50,000 promissory note from a customer.The annual interest rate is 6%.Principal and interest will be collected in cash at the maturity date of September 30,2013.
-Refer to Academy Grill Supply.The effect on the company's financial statements on September 30,2013,is as follows:

Question

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The promissory note is a financial asset for Academy Grill Supply, and it will earn interest income over the course of the year. On September 30, 2013, when the note is collected, both the principal and interest will be received in cash, which will increase the company's cash balance. This increase in assets will also increase stockholders' equity since the company's assets now exceed its liabilities. Therefore, the correct answer is A) Assets and Stockholders' equity increase.

Academy Grill Supply on October 1,2012,the Company Received a $50,000