Xi Co has a bills receivable for $3089 given in settlement of a debt. The value of the bill is made up of principal of $3000 and interest of $89. When the note is paid, at the end of its 90 day term, Xi Co's bank is debited with $ _____ and bills receivable is credited with $3089.

Question

Quizplus · Accepted Answer

When the note is paid, the bank is debited with the full value of the bill, which includes both the principal and the interest. Therefore, the bank is debited with $3089, and bills receivable is credited with the same amount, reflecting the settlement of the debt.

Xi Co Has a Bills Receivable for $3089 Given in Settlement