A business makes a payment of $1,400 on a note payable.Which of the following journal entries would be recorded?
A) Cash is credited and Notes Payable is debited for $1,400.
B) Notes Payable is credited and Cash is debited for $1,400.
C) Cash is credited and Financing Expense is debited for $1,400.
D) Cash is debited and Financing Revenue is credited for $1,400.

Question

Quizplus · Accepted Answer

When a payment is made on a note payable, cash is decreased (credited) and the liability (notes payable) is decreased (debited) by the amount of the payment.

A Business Makes a Payment of $1,400 on a Note