Travis County Bank Agrees to Lend Brickyard Corporation $200,000 on January

question 129

Multiple Choice

Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1.Brickyard signs a $200,000, 4%, 9-month note.Interest is due at maturity on September 30.The company's fiscal year ends June 30 and adjusting entries are recorded at that time only.
-Use the information above to answer the following question.On January 1,which of the following journal entries will be made by Brickyard to record the issuance of the note?

• A) Debit Interest Expense for $6,000, debit Cash $194,000, and credit Notes Payable for $200,000
• B) Debit Cash and credit Notes Payable for $200,000
• C) Debit Cash for $200,000, debit Interest Expense for $6,000, and credit Notes Payable for $206,000
• D) Debit Cash for $200,000, debit Interest Expense for $6,000, credit Notes Payable for $200,000, and credit Interest Payable for $6,000