Peach Tree Farm Peach Tree Farm received a promissory note from a customer on March 1, 2012. The principal amount of the note is $20,000; the terms are 3 months and 9% annual interest. Refer to the information for Peach Tree Farm. At the maturity date, the customer pays the amount due for the note and interest. What entry is required on the books of Peach Tree Farm on the maturity date assuming
that none of the interest had already been recognized?
A) Decrease cash and notes receivable by $20,000
B) Increase cash by $20,450, increase interest revenue by $450, and decrease notes receivable by $20,000
C) Increase cash by $20,450, increase notes receivable by $20,000, and increase interest revenue by $450
D) No entry is required; the customer pays the amount due to Peach Tree Farm.
B
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