A note receivable is issued in December.When the note is paid the following February, the payee's entry includes (assuming a calendar-year accounting period and no reversing entries) a
A)credit to Interest Receivable.
B)credit to Cash.
C)debit to Notes Receivable.
D)debit to Interest Income.

Question

Quizplus · Accepted Answer

When the note is paid, the payee will credit Interest Receivable to recognize the interest that was accrued in the previous year.

A Note Receivable Is Issued in December