Watunga County Bank Agrees to Lend Hoffman Granite Company $600000 $\begin{array}{lll} \text {Interest Expense } &36,000\\ \text { Cash. } &564,000\\ \text {Notes Payable } &&600,000\end{array}$

question 6

Short Answer

Watunga County Bank agrees to lend Hoffman Granite Company $600000 on January 1. Hoffman Granite Company signs a $600000 8% 9-month note. The entry made by Hoffman Granite on January 1 to record the proceeds and issuance of the note is a.
$\begin{array}{lll} \text {Interest Expense } &36,000\\ \text { Cash. } &564,000\\ \text {Notes Payable } &&600,000\end{array}$

b.
$\begin{array}{lll} \text { Cash} &600,000\\ \text { Notes Payable } &&600,000\end{array}$

c.
$\begin{array}{lll} \text { Cash } &600,000\\ \text { Interest Expense } &36,000\\ \text {Notes Payable } &636,000\end{array}$

d.
$\begin{array}{lll} \text { Cash } &600,000\\ \text { Interest Expense} &36,000\\ \text {Notes Payable } &&600,000\\ \text { Interest Payable } &&36,000\end{array}$

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Definitions:

Cash Collections

The process of gathering and processing payments received from customers, especially in terms of accounts receivable management.

Cash Disbursements

Payments made by a business in the form of cash or cash equivalents.

December

The last month of the year according to the Gregorian calendar, which is the twelfth one.

Merchandise

Goods that are purchased in finished form for the purpose of resale without further processing.