On November 1, 2014, Chancellor Co

question 50

Multiple Choice

On November 1, 2014, Chancellor Co.borrowed $80,000 from State Bank and signed a 12%, six-month note payable, all due at maturity.The interest on this loan is stated separately.At December 31, 2014, the adjusting entry for this note includes a:

• A)Debit to Interest Expense for $3,200.
• B)Credit to Notes Payable for $1,600.
• C)Credit to Cash for $4,800.
• D)Credit to Interest Payable for $1,600.

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Definitions:

Percentage

A ratio expressed as a fraction of 100.

Divisional Operating Income

Divisional operating income refers to the profit generated from the operations of a specific division within a company, excluding expenses and incomes that are not directly related to the division's operations.

Proportional Allocation

A method of distributing costs, resources, or revenues among various accounts or projects based on a predetermined criterion, such as usage or benefit.

Residual Income

The amount of income that an individual or business has after all expenses and debts have been paid.