Cheung Ltd Has an Account Receivable for $12 000 from R.Morris

Multiple Choice

Cheung Ltd has an account receivable for $12 000 from R.Morris that is overdue.Morris requests a 60-day extension of the payment date and Cheung Ltd agrees by accepting a fixed 60-day,12% promissory note in exchange for the accounts receivable.The entry Cheung Ltd makes on receipt of the note is:

A) Debit Accounts Receivable $12 000,debit Unearned Interest $236.71; credit Bills Receivable $12,236.71
B) Debit Bills Receivable $12 236,71; credit Accounts Receivable $12 000,credit Unearned Interest $236.71
C) Debit Bills Receivable $12,000; credit Accounts Receivable $12 000
D) Debit Bills Receivable $12 236,71; credit Accounts Receivable $12 000,credit Interest Revenue $236.71