Ross,immediately after receiving a note from a customer,discounted it at the bank and received the proceeds.Ross's entry on his books would include a:
A)debit to Cash.
B)credit to Interest Income.
C)credit to Notes Receivable.
D)All of the above

Question

Quizplus · Accepted Answer

When Ross discounts a note at the bank, he receives cash, which requires a debit to Cash. The discount represents interest income, so there is a credit to Interest Income. The note is no longer held by Ross, so there is a credit to Notes Receivable.

Ross,immediately After Receiving a Note from a Customer,discounted It at the Bank