10. On December 1, 2016, EMG Company purchased $60,000 of equipment by issuing a

Question

10. On December 1, 2016, EMG Company purchased $60,000 of equipment by issuing a 120- day, 10% note payable to Bank ofMaryland. Assuming the company's accounting period ends on December 31, the journal entry recorded by EMG Company on the note maturity date will include: A) Debit to Interest Expense for $1,500m yee wages of 348,000 for the month. What would the elfect of this ting equation? Debit to Interest Payable for $1,500 c) Debit to Interest Payable for $1,000 ase in Liabilities; $48,000 D) Debit to Interest Expense for $500 increasé th Sodkolder

Explanation / Answer

Journal entry on maturity date :

so answer is a) debit to interest expenses for $1500

Date accounts & explanation debit credit Notes payable 60000 Interest payable a/c 500 Interest expenses a/c 1500 Cash a/c 62000

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