On June 1, Year 1, Jensen Company acquired an 5.8%, ten-month note receivable from a customer in settlement of an existing account receivable of $310,000. Interest and principal are due at maturity.

The proper adjusting entry at December 31, Year 1, with regard to this note receivable includes a:

Multiple Choice

• Debit to Cash of $10,488.

• Debit to Notes Receivable of $17,980.

• Credit to Interest Revenue of $17,980.

• Debit to Interest Receivable of $10,488.