On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000.Alan made the appropriate year-end accrual.What is the journal entry as of March 1 to record the payment of the note assuming no reversing entry was made?
A)Debit Notes Payable $9,000;debit Interest Payable $120;credit Cash $9,120.
B)Debit Cash $9,240;credit Notes Payable $9,240.
C)Debit Notes Payable $9,240;credit Interest Payable $120;credit Interest Expense $120;credit Cash $9,000.
D)Debit Notes Payable $9,000;debit Interest Payable $120;debit Interest Expense $120;credit Cash $9,240.
E)Debit Notes Payable $9,000;debit Interest Expense $240;credit Cash $9,240.

Question

Quizplus · Accepted Answer

The journal entry to record the payment of the note payable would be to debit Notes Payable for the face value of $9,000, debit Interest Payable for the accrued interest of $120, debit Interest Expense for the interest accrued during the 120-day period of $120, and credit Cash for the total payment of $9,240. Therefore, the correct option is D.

On November 1,Alan Company Signed a 120-Day,8% Note Payable,with a Face