What entry should be made on the maturity date assuming the maker pays in full,and no adjusting entries have been made related to the note? (Use 360 days a year.)

A) Debit Notes Receivable $8,500; debit Interest Receivable $170; credit Sales $8,670.
B) Debit Cash $8,670; credit Interest Revenue $170; credit Notes Receivable $8,500.
C) Debit Cash $8,628; credit Interest Revenue $128; credit Notes Receivable $8,500.
D) Debit Cash $8,613; credit Interest Revenue $113; credit Notes Receivable $8,500.
E) Debit Cash $8,500; credit Notes Receivable $8,500.

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Zainab Fateema · Accepted Answer

Final Answer : B, Explanation :  The customer Payton Summers paid the $8,500 note in full after 90 days, which means that the note has reached maturity. The entry to record the payment is to debit Cash for the full amount received, which is $8,670 ($8,500 plus 8% interest for 90 days or $170), credit Notes Receivable for the original amount of the note, and credit Interest Revenue for the $170 of interest earned. Therefore, the correct entry is B.

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