Which of the following statements is not correct?
A)When a note receivable is discounted, the proceeds are computed by subtracting the discount from the maturity value of the note.
B)The entry to record the discounting of a note receivable may result in the recognition of interest expense.
C)When a note is discounted at a bank, the proceeds are always less than the maturity value of the note.
D)When a note receivable is discounted at a bank, the entry to record the transaction includes a debit to cash.

Question

Quizplus · Accepted Answer

The entry to record the discounting of a note receivable typically results in the recognition of interest income, not interest expense.

Which of the Following Statements Is Not Correct