O'Martin & Lowry, Inc. accepted a $150,000, 8%, 90-day note receivable for services rendered to a client. Thirty days later, O'Martin & Lowry discounted the note at a bank at 10%. Assume interest has not been recognized for the first month.
The entry to record the proceeds from the sale of the note would include
a debit to Cash for $150,150.
debit to Cash for $150,450.
credit to Interest Receivable for $1,000.
credit to Interest Expense for $1,000.