On March 17, Grady Company agrees to accept a 60-day, 10%, $5,500 note from Alert Company to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Alert Company?

A) Debit accounts receivable $5,500; credit notes payable $5,500

B) Debit accounts payable $5,500; credit notes payable $5,500

C) Debit notes payable $5,500; credit accounts payable $5,500

D) Debit cash $5,500; credit notes payable $5,500

E) Debit sales $5,500; credit notes payable $5,500