On November 1, Year 1, Salem Corporation sold land priced at $940,000 in exchange for a 6%, six-month note receivable.

Assuming the maker of the note defaults on May 1, Year 2, Salem will record on this date:

Multiple Choice

An accounts receivable in the amount of $968,200, as well as interest revenue of $18,800.

An accounts receivable of $940,000 from the maker of the note.

An accounts receivable in the amount of $940,000, as well as interest revenue of $18,800.

An accounts receivable in the amount of $940,000, as well as interest expense of $28,200.