Question
Milan Tyers has an account receivable of $18,000 from Sunderland Ltd that is over. Sunderland Ltd requests a 60-day extension of the payment date and
Milan Tyers has an account receivable of $18,000 from Sunderland Ltd that is over. Sunderland Ltd requests a 60-day extension of the payment date and Milan Tyers agrees by accepting a fixed 60-day, 14% promissory note in exchange for the accounts receivable.
Which of the following is the general journal entry Milan Tyers makes on receipt of the promissory note?
Group of answer choices
a. Debit bills receivable $18,000; credit accounts receivable $18,000
b. Debit accounts receivable $18,000; debit unearned interest $414.25; credit bills receivable $18,414.25
c. Debit bills receivable $18,414.25; credit accounts receivable $18,000; credit unearned interest $414.25
d. Debit bills receivable $18,414.25; credit accounts receivable $18,000; credit interest revenue $414.25
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