A business makes a payment of $1,200 on a note payable,consisting of a $200 interest payment and a $1,000 principal payment.Which of the following journal entries would be recorded?
A) Cash is credited for $1,000; Interest expense is credited for $200; and Notes payable is debited for $1,200.
B) Notes payable is credited for $1,000; Cash is credited for $200; and Interest expense is debited for $1,200.
C) Cash is credited for $1,200; Notes payable is debited for $1,000; and Interest expense is debited for $200.
D) Notes payable is credited for $1,200; Cash is debited for $1,000; and Interest expense is debited for $200.
Correct Answer:
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