Barrel Enterprises Was Unable to Collect a $1,900 Note Receivable

Multiple Choice

Barrel Enterprises was unable to collect a $1,900 note receivable plus $80 interest on the maturity date, but hoped to collect the amount in the future. Barrel Enterprises should record this event on the maturity date as:

A) debit Bad Debts Expense $1,900; credit Notes Receivable $1,900.
B) debit Allowance for Doubtful Accounts $1,980; credit Notes Receivable $1,980.
C) debit Accounts Receivable $1,900; debit Interest Income $80; credit Cash $1,980.
D) debit Accounts Receivable $1,980; credit Interest Income $80; credit Notes Receivable $1,900.