Question

On January 1, Year 1, Data Corporation accepts a $10,000 three-month, nine percent promissory note from one of its customers. It will record this transaction with a _____.

A) debit to Accounts Receivable for $10,000
B) debit to Notes Receivable for $10,000
C) credit to Service Revenue for $10,225
D) debit to Accounts Receivable for $10,225

Answer 1

The correct answer is B) debit to Notes Receivable for $10,000. So, the correct answer is option B.

Step-by-step explanation:

The correct answer is B) debit to Notes Receivable for $10,000.

When Data Corporation accepts a promissory note from its customer, it records the transaction by making a debit entry to Notes Receivable. This is because the promissory note represents an amount owed to Data Corporation by the customer, and it is considered an asset for the company.

So, the correct answer is option B.