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On August 1, Amy Company Borrowed $40,000 from Another Company

Question 75

Multiple Choice

On August 1, Amy Company borrowed $40,000 from another company on a 6%, one-year note. The journal entry that Amy would record on August 1 would include which of the following?


A) A debit to Notes Receivable for $40,000.
B) A credit to Cash for $40,000.
C) A credit to Notes Payable for $40,000.
D) A debit to Interest Expense for $2,400.

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