A Five-Year, 6%, $47,000 Note Payable Is Issued on January

question 113

Multiple Choice

A five-year, 6%, $47,000 note payable is issued on January 1.Terms include fixed annual principal payments of $9,400, plus interest on the outstanding balance.The entry to record the first instalment payment will include a

• A)debit to Notes Payable of $9,400.
• B)credit to Interest Expense of $2,820.
• C)credit to Notes Payable of $12,220.
• D)debit to Cash of $9,400.

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Definitions:

Bargaining Power

The capacity of one party to influence the agreement terms in negotiation scenarios due to their position or alternatives.

Attractive Industry

A sector of the economy that is appealing to investors and companies due to factors like high growth potential, profitability, and low barriers to entry.

Intense Competition

A market condition where there is a high level of rivalry among businesses, often leading to innovation and lower prices for consumers.

Industry Environmental Factors

External influences that affect an industry’s performance, competitiveness, and opportunities, including economic, technological, legal, and sociocultural factors.