A company purchased equipment by issuing a $200,000,one-year,8% note payable.The transaction would be recorded in the accounting records with a credit to
A)Notes payable for $200,000.
B)Notes payable for $216,000.
C)Notes payable for $184,000.
D)Notes payable for $208,000.

Question

Quizplus · Accepted Answer

The company issued a note payable for $200,000 to purchase the equipment. The interest is included in the note payable and will be recorded separately at the end of the year. Therefore, the credit to Notes payable should be for the full amount of $200,000.

A Company Purchased Equipment by Issuing a $200,000,one-Year,8% Note Payable