A note renewed at maturity would have the following effects for a buyer:
A) debit to Notes Payable (new); debit to Notes Payable (old); credit to Cash; credit to Interest Expense.
B) debit to Notes Payable (old); debit to Cash; credit to Notes Payable (new); credit to Interest Expense.
C) debit to Notes Payable (old); credit to Notes Payable (new); credit to Cash; credit to Interest Expense.
D) debit to Notes Payable (old); debit to Interest Expense; credit to Cash; credit to Notes Payable (new).

Question

Quizplus · Accepted Answer

When a note is renewed, the old note payable is debited (removed), interest expense is debited (for the interest on the note), cash is credited if any payment is made, and the new note payable is credited (added).

A Note Renewed at Maturity Would Have the Following Effects