Specialty Inc

Multiple Choice

Specialty Inc.converts an existing account receivable to a note receivable to allow an extended payment period.Specialty receives a $2,000,3-month,12% promissory note from its customer.What entry will Specialty make upon receipt of the note?

A) Debit Notes Receivable and credit Accounts Receivable for $2,060.
B) Debit Accounts Receivable and credit Notes Receivable for $2,000.
C) Debit Notes Receivable for $2,000,debit Interest Receivable for $60,credit Accounts Receivable for $2,000,and credit Interest Revenue for $60.
D) Debit Notes Receivable and credit Accounts Receivable for $2,000.