A company purchased equipment by issuing a $200,000,one-year,8% note payable.The transaction would be recorded in the accounting records with a credit to Notes Payable for:
A)$200,000.
B)$216,000.
C)$184,000.
D)$208,000.

Question

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Initially,the company records each liability at the amount of cash a creditor would accept to settle the liability immediately after a transaction or event creates the liability.The journal entry to establish this note would include a credit to Notes Payable for $200,000.

A Company Purchased Equipment by Issuing a $200,000,one-Year,8% Note Payable