On April 12, Hong Company agrees to accept a 60-day, 10%, $4,800 note from Indigo Company to extend the due date on an overdue account payable. What is the journal entry made by Indigo Company to record the transaction?
a. Debit Cash $4,800; credit Notes Payable $4,800.
b. Debit Accounts Receivable $4,800; credit Notes Payable $4,800.
c. Debit Sales $4,800; credit Notes Payable $4,800.
d. Debit Notes Payable $4,800; credit Accounts Payable $4,800.
e. Debit Accounts Payable $4,800; credit Notes Payable $4,800.