The ABC Company rendered services on 1/1/15 and accepted a $10,000, 6%, 5-year note receivable with interest to be paid annually on December 31 through 12/31/19. The principal will be paid in full on 12/31/19. ABC's imputed interest rate is 10% and the effective amortization method is used.

Transcribed Image Text:

The initial journal entry to record the receipt of the note will include an entry to which account for what approximate amount? Select one: O a. Debit to Discount on Notes Receivable for $2,274 O b. Credit to Discount on Notes Receivable for $1,597 Oc. Credit to Discount on Notes Receivable for $2,274 O d. Credit to Service Revenue for $7,726 Ge. Credit to Service Revenue for $10,000 The initial journal entry to record the receipt of the note will include an entry to which account for what approximate amount? Select one: O a. Debit to Discount on Notes Receivable for $2,274 O b. Credit to Discount on Notes Receivable for $1,597 Oc. Credit to Discount on Notes Receivable for $2,274 O d. Credit to Service Revenue for $7,726 Ge. Credit to Service Revenue for $10,000

Answer rating: 100% (QA)

Option b Credit to discount on Note... View the full answer