On July 9, Mifflin Company receives a $8,500, 90-day, 8% note from overdue customer Payton Summers as payment on account. What entry should be made on the maturity date assuming the maker pays in full?

Question

Quizplus · Accepted Answer

When the note is paid in full, we need to record the following:
- Debit Cash for the amount received, $8,670
- Credit Notes Receivable for the principal amount, $8,500
- Credit Interest Revenue for the interest earned, which is calculated as follows: 
    - $8,500 x 8% x 90/360 = $170

Therefore, choice B is the correct entry.

On July 9, Mifflin Company Receives a $8,500, 90-Day, 8