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A Business Makes a Payment of $1,200 on a Note

Question 106

Multiple Choice

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)  Notes payable 1,000 Interest expense 200 Cash 1,200\begin{array} { | l | r | r | } \hline \text { Notes payable } & 1,000 & \\\hline \text { Interest expense } & 200 & \\\hline \text { Cash } & & 1,200 \\\hline\end{array}
B)  Cash 1,200 Notes payable 1,000 Interest expense 200\begin{array} { | c | r | r | } \hline \text { Cash } & 1,200 & \\\hline \text { Notes payable } & & 1,000 \\\hline \text { Interest expense } & & 200 \\\hline\end{array}
C)  Notes payable 1,200 Cash 1,000 Interest expense 200\begin{array} { | l | r | r | } \hline \text { Notes payable } & 1,200 & \\\hline \text { Cash } & & 1,000 \\\hline \text { Interest expense } & & 200 \\\hline\end{array}
D)  Cash 1,000 Notes payable 1,200 Interest expense 200\begin{array} { | c | r | r | } \hline \text { Cash } & 1,000 & \\\hline \text { Notes payable } & & 1,200 \\\hline \text { Interest expense } & & 200 \\\hline\end{array}

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