Final answer:
The question relates to the acceptance of a promissory note for a past-due account receivable, where a $26,000 note with a 10% interest rate over 45 days grants Miranda Lee a time extension for payment. Option A is correct.
Step-by-step explanation:
The student's question pertains to a financial transaction involving a promissory note. The question states: 'Accepted a $26,000, 45-day, 10% note in granting Miranda Lee a time extension on her past-due account receivable.' To analyze this statement, we must understand several concepts related to promissory notes and accounts receivable in business accounting.
A promissory note is a financial instrument that contains a written promise by one party (the note's issuer or maker) to pay another party (the note's payee) a definite sum of money, either on demand or at a specified future date.
In this case, the note's principal amount is $26,000, the duration is 45 days, and the interest rate is 10%. By accepting this note, the issuer is granting a time extension for the payment of the past-due account receivable, which is usually an unpaid invoice that a company holds from its customer for goods or services rendered on credit.