Chen Inc. accepted a two-year noninterest-bearing note for $605,000 on January 1, 2021. The note...
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Accounting
Chen Inc. accepted a two-year noninterest-bearing note for $605,000 on January 1, 2021. The note was accepted as payment for merchandise with a fair value of $500,000. The effective interest rate is 10%. What is the correct entry to record the note?
Multiple Choice
Notes receivable
605,000
Interest revenue
105,000
Cost of sales
500,000
Notes receivable
500,000
Accounts receivable
500,000
Notes receivable
605,000
Discount on notes receivable
105,000
Sales revenue
500,000
Notes receivable
605,000
Accounts receivable
605,000
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