Accrued interest was recorded annually. On December 31, 20C, the due date of the note, Bennett paid the amount due and recorded the transaction with which of the following?
A) A debit to notes payable for $317,520.
B) A debit to notes payable for $400,000.
C) A credit to notes payable for $400,000.
D) A credit to notes payable for $317,520.

Question

Quizplus · Accepted Answer

The note's principal amount is $400,000, so Bennett would debit notes payable for $400,000 to remove the liability from the books upon payment.

Accrued Interest Was Recorded Annually