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On November 1, 2000, Raceway Corporation sold land priced at $700,000 in exchange for a 12%,...

Question:

On November 1, 2000, Raceway Corporation sold land priced at $700,000 in exchange for a 12%, six-month note receivable. Raceway's balance sheet at December 31, 2000, includes which of the following as a result of the sale of land on November 1?

A) Notes Receivable of $700,000 and Interest Receivable of $14,000.

B) Notes Receivable of $742,000 and Interest Receivable of $14,000.

C) Notes Receivable of $700,000 and Interest Receivable of $42,000.

D) Notes Receivable of $700,000 only.

Current Assets:

Current assets are short-term assets that take less than a year to convert into cash. We can also refer to them as the liquid assets of a company. We use current assets to repay the current liabilities and provide for day-to-day operations.

Answer and Explanation: 1

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Correct Answer: Option A) Notes Receivable of $700,000 and Interest Receivable of $14,000.

Explanation:

Notes receivable are recorded in the...

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Notes Receivable: Definition, Maturity Date & Interest

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Chapter 7 / Lesson 6
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Learn what loan maturity date is and how it affects your final loan payment. Find out the difference between short-term, medium-term, and long-term maturity dates.


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