Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1.Brickyard signs a $200,000, 4%, 9-month note.Interest is due at maturity on September 30.The company's fiscal year ends June 30 and adjusting entries are recorded at that time only.
-Use the information above to answer the following question.On January 1,which of the following journal entries will be made by Brickyard to record the issuance of the note?
A) Debit Interest Expense for $6,000, debit Cash $194,000, and credit Notes Payable for $200,000
B) Debit Cash and credit Notes Payable for $200,000
C) Debit Cash for $200,000, debit Interest Expense for $6,000, and credit Notes Payable for $206,000
D) Debit Cash for $200,000, debit Interest Expense for $6,000, credit Notes Payable for $200,000, and credit Interest Payable for $6,000

Question

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Brickyard Corporation receives $200,000 in cash and incurs a liability of $200,000 in the form of a note payable. Interest is not recorded at issuance but will be accrued over time.

Travis County Bank Agrees to Lend Brickyard Corporation $200,000 on January