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What entry to record the conversion of accounts receivable

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Problem 1: On March 1, 2020, Sam Ventura has $5,000 of outstanding accounts receivable to Dwight Company. Dwight's year end is December 31. Sam cannot pay the amount immediately but is willing to sign a promissory note. The interest is 6% per annum, to be collected when the note is due. Sam promises to pay on March 1, 2021. The entry to record the conversion of the accounts receivable to a note receivable on March 1, 2020 is:

Select one:

a. Debit Accounts Receivable $5,000, Credit Allowance for Doubtful Accounts $5,000
b. Debit Accounts Receivable $5,000, Credit Notes Receivable $5,000
c. Debit Notes Receivable $5,000, Credit Cash $5,000
d. Debit Notes Receivable $5,000, Credit Accounts Receivable $5,000

Reference no: EM132696912

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