A note receivable was NOT paid at maturity.Which of the following will be included in the journal entry to record the dishonoring of the note at maturity?
A) A debit to Cash
B) A debit to Interest expense
C) A debit to Accounts receivable
D) A debit to Uncollectible account expense

Question

Quizplus · Accepted Answer

When a note receivable is not paid at maturity, the amount is typically transferred back to Accounts Receivable, indicating that the company now recognizes the amount as a receivable again, rather than a note receivable. Cash is not debited because no cash is received, and neither Interest Expense nor Uncollectible Account Expense are debited in the initial journal entry for dishonoring the note.

A Note Receivable Was NOT Paid at Maturity