Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 8 - Reporting and Analyzing Receivables - Questions: 12

Answer

Options available to the lender: Lender (Payee) shall have a claim against Dotson Company, for the note payable and interest. If the lender expects it eventually will be able to collect, the two parties negotiate new terms to make it easier for the borrower to repay the debt.

Work Step by Step

If there is no hope of collection, the payee should write off the face value of the note.
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