On November 1, Orpheum Company accepted a $10,000, 90-day, 8% note from a customer to settle a past-due account. What entry should be made on November 1 to record the note acceptance?
A)Debit Note Receivable $10,000; credit Cash $10,000.
B)Debit Note Receivable $10,000; credit Accounts Receivable $10,000.
C)Debit Note Receivable $10,000; credit Sales $10,000.
D)Debit Cash $10,000; credit Sales $10,000.
E)Debit Sales $10,000; credit Accounts Receivable $10,000.

Question

Quizplus · Accepted Answer

When a company accepts a note receivable, it debits Note Receivable and credits the account that was previously receivable (in this case, Accounts Receivable).

On November 1, Orpheum Company Accepted a $10,000, 90-Day, 8