The Following Information Was Extracted from the Financial Records of Lewis

question 103

Multiple Choice

The following information was extracted from the financial records of Lewis Company.
$$\begin{array} { | l | r | r | } \hline & { 2017 } &{ 2016 } \\\hline \text { Balance Sheet } & & \\\hline \text { Nates payable } & \$ 400,000 & \$ 400,000 \\\hline \text { Less: Discount on notes payable } & 24,000 & 28,000 \\\hline & & \\\hline \text { Income Statement } & & \\\hline \text { Interest expense } & \$ 32,800 & \$ 32,400 \\\hline\end{array}$$
Based on this information, the journal entry Lewis Company should prepare to record interest expense during 2017 would include:

• A)a credit to Interest Payable for $32,800.
• B)a credit to Discount on Notes Payable for $24,000.
• C)a credit to Cash for $28,000.
• D)a credit to Notes Payable for $4,800.