On January 1,a firm purchased equipment for $10,000,signing a 30-day note bearing interest at 12 percent a year.The entry to record the payment of the amount due on January 31 will include a debit to Notes Payable for
A) $10,000 and a credit to Cash for $10,000.
B) $10,100 and a credit to Cash for $10,100.
C) $10,000,a debit to Interest Expense for $1,200,and a credit to Cash for $11,200.
D) $10,000,a debit to Interest Expense for $100,and a credit to Cash for $10,100.

Question

Quizplus · Accepted Answer

The interest for 30 days on a $10,000 note at 12% per annum is $100. Therefore, the entry will include a debit to Notes Payable for $10,000, a debit to Interest Expense for $100, and a credit to Cash for $10,100.

On January 1,a Firm Purchased Equipment for $10,000,signing a 30-Day