On August 1, Amy Company Borrowed $40,000 from Another Company

question 122

Multiple Choice

On August 1, Amy Company borrowed $40,000 from another company on a 6%, one-year note. The journal entry on December 31 would include which of the following?

• A)A debit to Notes Payable for $40,000.
• B)A debit to Interest Receivable for $1,000.
• C)A credit to Interest Payable for $2,400.
• D)A debit to Interest Expense for $1,000.

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Definitions:

Faulty Cause

A logical fallacy where a cause is incorrectly identified for an effect because the real cause is either unknown or overlooked.

Qualifiers

Words or phrases that modify statements, often to soften absolutes or make expressions less general and more accurate.

Online Test

An examination administered on the internet, allowing participants to complete it electronically.

Save Button

A graphical user interface element used to instruct the computer to record data or a document onto a storage medium.