Betty Inc, has an Accounts Payable of $10,000 to a supplier. The company is shor

Question

Betty Inc, has an Accounts Payable of $10,000 to a supplier. The company is short of and on July 1, the suppliers agrees to accept a 20 day 12% note. What journal entry should Bedy Inc make on July 1? What effect does this entry have on the accounting equation? Assets = Liabilities + Equity No Change = No Change + No Change On July 31, the company pays the note in full. What journal entry should the company make to record the payment on July 31? What effect does this entry have on the accounting equation? Assets = Liabilities + Equity Decrease =Decrease +

Explanation / Answer

Notes payable (db) $10,000
Cash (cr) $10,100
interest expense (db) 12%/12*10,000=$100

Liabilities- decrease
assets- Decrease
Equity - no change

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