On September 1,Knack Company Signed a $50,000,90-Day,5% Note Payable with Central

question 44

Multiple Choice

On September 1,Knack Company signed a $50,000,90-day,5% note payable with Central Savings Bank.What is the journal entry that should be recorded by Knack upon maturity of the note? (Use 360 days a year.)

• A)Debit Interest Expense $625; credit Interest Payable $625.
• B)Debit Notes Payable $50,000; credit Interest Revenue $625; credit Cash $49,375.
• C)Debit Cash $50,625; credit Notes Receivable $50,625.
• D)Debit Notes Payable $50,625; credit Cash $50,625.
• E)Debit Notes Payable $50,000; debit Interest Expense $625; credit Cash $50,625.

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