On August 1, a $48,000, 9%, 3-year installment note payable is issued by a company. The...
On August 1, a $48,000, 9%, 3-year installment note payable is issued by a company. The note requires equal payments of principal plus accrued interest of $18,962.63. The entry to record the first payment on July 31 would include:
Multiple Choice
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Debit to Notes Payable of $18,962.63
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Debit to Interest Expense of $4,320.00.
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Debit to Cash of $18,962.63.
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Credit to Notes Payable of $18,962.63
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Credit to Cash $14,642.63
Homework Answers
| The entry to record the first payment on July 31 is | |||
| Debit | Credit | ||
| Interest Expense | 4320.00 | =48000*9% | |
| Notes Payable | 14642.63 | ||
| Cash | 18962.63 | ||
| Option B Debit to Interest Expense of $4,320.00 is correct | |||
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