On May 1, a Firm Purchased Equipment for $10,000, Signing

On May 1, a firm purchased equipment for $10,000, signing a 90-day note bearing interest at 12 percent. The entry to record the payment of the amount due on July 30 is (Assume 360 days in a year.)

A) debit Equipment $10,000 and a credit to Cash for $10,000.
B) debit Notes Receivable $11,200 and a credit to Cash for $11,200.
C) debit Notes Payable $10,000, a debit to Interest Expense for $300, and a credit to Cash for
$10,300.
D) a debit to Notes Payable $11,200, a debit to Interest Income for $1,200, and a credit to Cash for $11,200.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free