contestada

Upon collection of the amount due on an interest-bearing promissory note from a customer, the accountant would debit Cash, credit Notes Receivable, and

a. debit Interest Expense.
b. credit Interest Income
c. credit Interest Expense.
d. debit Interest Income

Respuesta :

Answer:

b. credit Interest Income

Explanation:

The journal entry to record the collection of the amount due is shown below:

Cash A/c Dr XXXXX

     To Notes receivable A/c XXXXX

     To Interest income A/c XXXXX

(Being the collection of the amount due is recorded)

In this, we debited the cash account as it increases the asset, while credited the notes receivable and interest income because interest income is the revenue and the revenue is always credited