When a company pays an interest-bearing note payable on the due date, the journal entry on the books of the company making the payment includes
A) debiting Notes Payable and Interest Expense and crediting Cash.
B) debiting Cash and crediting Notes Payable and Interest Expense.
C) debiting Notes Payable and Cash and crediting Interest Revenue.
D) debiting Cash and Interest Expense and crediting Notes Payable.

Question

Quizplus · Accepted Answer

When a company pays an interest-bearing note payable, it debits Notes Payable for the principal amount and Interest Expense for the interest amount, and credits Cash for the total payment made.

When a Company Pays an Interest-Bearing Note Payable on the Due