Buyer Company asks to extend its past due $620 account payable to Seller Company. Seller Company agrees to accept $110 cash and a 60 -day, 10%, $510 note payable to replace the account payable. How does Buyer Company record this event in the general journal? Accounts payable 510 Cash 110 Notes payable 620 Accounts payable 620 Cash 110 Notes payable 510 Accounts payable 110 Cash 110 Buyer Company has no entry to record for this transaction Cash 110 Accounts payable 110 Solution B) .

1. Buyer Company asks to extend its past due $620 account payable to Seller Company. Seller
Company agrees to accept $110 cash and a 60 -day, 10%, $510 note payable to replace the
account payable. How does Buyer Company record this event in the general journal? Accounts
payable 510 Cash 110 Notes payable 620 Accounts payable 620 Cash 110 Notes payable 510
Accounts payable 110 Cash 110 Buyer Company has no entry to record for this transaction Cash
110 Accounts payable 110
Solution
B)
Accounts Payable 620
Cash 110
Notes Payable 510