If your customer does not pay the note at maturity,the journal entry on your books would be:
A)debit Notes Payable and credit Accounts Payable.
B)debit Accounts Payable,credit Interest Income and credit Notes Payable.
C)debit Accounts Receivable,credit Interest Income and credit Notes Receivable.
D)debit Notes Receivable,credit Interest Income,and credit Accounts Receivable.

Question

Quizplus · Accepted Answer

When a customer does not pay a note at maturity, the note is dishonored. The correct entry is to debit Accounts Receivable to reflect the amount now owed by the customer, and credit Notes Receivable to remove the note from the books. Additionally, credit Interest Income for any interest that was supposed to be received.

If Your Customer Does Not Pay the Note at Maturity,the