Watunga county bank agrees to lend hoffman granite company $600,000 on January 1
ID: 2431880 • Letter: W
Question
Watunga county bank agrees to lend hoffman granite company $600,000 on January 1. Hoffman granite company signs a $600,000, 8%, 9-month note. What entry will hoffman granite make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?
A)notes payable............636,000
cash............................................636,000
B) Notes payable.............600,000
interest payable................36,000
cash...............................................636,000
C) interest expense............36,000
notes payable..................600,000
cash.............................................636,000
D) interest payable.................24,000
notes payable.....................600,000
interest expense.......................12,000
cash..........................................................636,000
Explanation / Answer
Answer is B
General Journal Debit Credit Notes Payable $600,000 Interest Payable($600,000 * 0.08 * 9/12) $36,000 Cash $636,000Related Questions
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