Question

Paper Company receives a $4,598, three-month, 3% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note

Answer 1

Answer and Explanation:

The journal entry that should be recorded at the time of receiving the note is given below:

Notes Receivable - Dame Company $3,164

To Accounts Receivable - Dame Company $3,164

(Being the receiving of the note is recorded)

Here the note receivable is debited as it increased the assets and credited the account receivable as it decreased the assets