Which of the following would be included in the entry by the payee to record a dishonored note receivable?
A) a debit to Accounts Receivable
B) a debit to Interest Revenue
C) a debit to Notes Receivable
D) a credit to Interest Expense

Question

Quizplus · Accepted Answer

When a note receivable is dishonored, the payee must reverse the note receivable and recognize that the amount will not be collected as originally agreed. This involves debiting Accounts Receivable to reflect the expectation of eventually collecting the amount through a different means, such as regular collection processes.

Which of the Following Would Be Included in the Entry