Reference no: EM132807106

Problem 1: Norwood Corp. receives a $7,000, 6-month, 4% note from Zest Corp. in settlement of a past-due accounts receivable. What entry will Norwood Corp. make upon receiving the note?

Option (a) Notes Receivable.......................................................... 7,140
Accounts Receivable............................................. 7,140

Option (b) Notes Receivable.......................................................... 7,140
Accounts Receivable............................................. 7,000
Interest Revenue ................................................... 140

Option (c) Notes Receivable.......................................................... 7,000
Accounts Receivable............................................. 7,000

Option (d) Notes Receivable.......................................................... 7,000
Interest Receivable....................................................... 140
Accounts Receivable............................................. 7,000
Interest Revenue.................................................... 140