Multiple Choice
On April 1, a firm purchased equipment for $5,000, signing a 60-day note bearing interest at 12 percent. The entry to record the payment of the amount at maturity is (Assume 360 days in a year.)
A) a debit to Notes Payable $5,100 and a credit to Cash for $5,100.
B) a debit to Notes Receivable for $5,000 and a credit to Cash for $5,000.
C) a debit to Accounts Payable $5,000, a debit to Interest Income for $600, and a credit to Cash for $5,600.
D) a debit to Notes Payable for $5,000, a debit to Interest Expense for $100, and a credit to Cash for $5,100.
Correct Answer:
Verified
Correct Answer:
Verified
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