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On January 1,2010,Merrill Company Borrowed $100,000 on a 10-Year,7% Installment

Question 90

Multiple Choice

On January 1,2010,Merrill Company borrowed $100,000 on a 10-year,7% installment note payable.The terms of the note require Merrill to pay 10 equal payments of $14,238 each December 31 for 10 years.The required general journal entry to record the first payment on the note on December 31,2010 is:


A)
 Notes Payable 7,238 Interest expense 7,000 Cash 14,238\begin{array} { | l | r | r | } \hline \text { Notes Payable } & 7,238 & \\\hline \text { Interest expense } & 7,000 & \\\hline \text { Cash } & & 14,238 \\\hline\end{array}
B)
 Notes Payable 7,000 Interest expense 7,238 Cash 14,238\begin{array} { | l | r | r | } \hline \text { Notes Payable } & 7,000 & \\\hline \text { Interest expense } & 7,238 & \\\hline \text { Cash } & & 14,238 \\\hline\end{array}
C)
 Notes Payable 10,000 Interest expense 7,000 Cash 17,000\begin{array} { | l | r | r | } \hline \text { Notes Payable } & 10,000 & \\\hline \text { Interest expense } & 7,000 & \\\hline \text { Cash } & & 17,000 \\\hline\end{array}
D)
 Notes Payable 14,238 Cash 14,238\begin{array} { | c | r | r | } \hline \text { Notes Payable } & 14,238 & \\\hline \text { Cash } & & 14,238 \\\hline\end{array}
E)
 Notes Payable 10,000 Interest expense 4,238 Cash 14,238\begin{array} { | l | r | r | } \hline \text { Notes Payable } & 10,000 & \\\hline \text { Interest expense } & 4,238 & \\\hline \text { Cash } & & 14,238 \\\hline\end{array}

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