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On September 1, 2020, the Matisse Co. sold merchandise to its customer, Jackson Jones, for $10,000. Jackson Jones signed a 12%, 1-year note, requiring payment
On September 1, 2020, the Matisse Co. sold merchandise to its customer, Jackson Jones, for $10,000. Jackson Jones signed a 12%, 1-year note, requiring payment in full, for principal and interest, to be made at maturity. Which of the following statements would be true? 1) The journal entry, at maturity, would include a debit to interest receivable of $1,200 and a credit to interest revenue of $1,200. 2) The journal entry on to record interest earned in 2020 would include a debit to interest receivable of $300 and a credit to interest revenue of $300. 3) The journal entry at maturity would include a debit to note receivable of $30,000. 4) Total revenue earned on the merchandise sold to Jackson Jones is $11,200. 5) None of the responses are correct
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