T/F: Which of the following statements are true?

1. A debit balance in the discount on notes payable account will normally become a debit to Interest Expense.
2. When a bank collects a notes receivable, it notifies the payee that the net amount has been added to the payee's account by using a credit advice.
3. A written promise to pay a specific sum of money at a definite future date is called a promissory note.
4. If the time of the note is stated in days, the due date is the specified number of days after the issue date.
5. The proper entry to make when a note is paid at maturity depends on whether it is an interest-bearing or a non-interest-bearing note.
6. Under accrual accounting, revenue is recognized when it is earned; therefore, accrued interest must be recorded at the end of the period.
7. To obtain an extension of time for the payment of an account, a customer may issue a note for all or part of the amount due.

American Bank has loaned $12,000 to Shoreline Petroleum Inc. using a 60-day non-interest-bearing note. The bank discounted the note at 12%. The proceeds of the loan will be:

$12,000.

$11,760.

$240.

$12,240.