Warner Enterprises Was Unable to Collect a $1,500 Note Receivable

Multiple Choice

Warner Enterprises was unable to collect a $1,500 note receivable plus $75 interest on the maturity date,but hoped to collect the amount in the future.Warner should record this as:

A) debit Bad Debts Expense $1,500;credit Notes Receivable $1,500.
B) debit Allowance for Doubtful Accounts $1,575;credit Notes Receivable $1,575.
C) debit Accounts Receivable $1,500;credit Interest Income $75;credit Cash $1,575.
D) debit Accounts Receivable $1,575;credit Interest Income $75;credit Notes Receivable $1,500.