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Compute credit to interest expense

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O'Martin & Lowry, Inc. accepted a $150,000, 8%, 90-day note receivable for services rendered to a client. Thirty days later, O'Martin & Lowry discounted the note at a bank at 10%. Assume interest has not been recognized for the first month.

The entry to record the proceeds from the sale of the note would include

a debit to Cash for $150,150.
debit to Cash for $150,450.
credit to Interest Receivable for $1,000.
credit to Interest Expense for $1,000.

Reference no: EM131760245

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