When a note is dishonoured (but eventual collection is expected), the payee's entry includes a
A)debit to Cash.
B)credit to Accounts Receivable.
C)debit to Interest Expense.
D)credit to Notes Receivable.

Question

Quizplus · Accepted Answer

When a note is dishonoured but eventual collection is expected, the payee credits Notes Receivable to remove the note from their books and debits Accounts Receivable to reflect the amount expected to be collected.

When a Note Is Dishonoured (But Eventual Collection Is Expected)