West County Bank agrees to lend Drake Builders Company $400000 on January 1.Drake Builders Company signs a $400000 6% 6-month note.Recording the pay off of the note and interest at maturity assuming that interest has been accrued to June 30 includes a(n)
A) Decrease to Notes Payable and to Cash for $412000.
B) Decrease to Notes Payable for $400000 decrease to Interest Payable for $12000 and a decrease to Cash for $412000.
C) Increase to Interest Expense for $12000 decrease to Notes Payable for $400000 and a decrease to Cash for $412000.
D) Decrease to Interest Payable for $6000 decrease to Notes Payable for $400000 increase to Interest Expense for $6000 and a decrease to Cash for $412000.
Correct Answer:
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