Cannon Ltd Bought Display Racks with a Fair Market Value

question 122

Multiple Choice

Cannon Ltd bought display racks with a fair market value of $150,000.The corporation signed a 3-year interest-bearing note at 8%.The entry to record the transaction would include

• A)A debit to Notes Payable for $150,000
• B)A debit to Interest Expense for $12,000
• C)A credit to Notes Payable for $150,000
• D)A credit to Interest Payable for $400
• E)A credit to Notes Payable for $39,692

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Definitions:

Electrolyte

A chemical substance containing free ions that make it electrically conductive, typically used in batteries and some types of fuel cells.

Hydrogen

A colorless, odorless, and highly flammable gas that is the most abundant element in the universe, commonly used in fuel cells and as a clean energy source.

Cold Cranking Amp

A measure of a battery's ability to start an engine in cold temperatures, specifically the number of amps a battery can support for 30 seconds at 0°F.

Volts

The unit of electric potential difference or electromotive force, measuring the energy per unit charge that drives current flow.