A Business Makes a Payment of $1,200 on a Note

question 29

Multiple Choice

A business makes a payment of $1,200 on a note payable,consisting of a $200 interest payment and a $1,000 principal payment.Which of the following journal entries would be recorded?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Notes payable } & 1,000 & \\
• \hline \text { Interest expense } & 200 & \\
• \hline \text { Cash } & & 1,200 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | r | r | }
• \hline \text { Cash } & 1,200 & \\
• \hline \text { Notes payable } & & 1,000 \\
• \hline \text { Interest expense } & & 200 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Notes payable } & 1,200 & \\
• \hline \text { Cash } & & 1,000 \\
• \hline \text { Interest expense } & & 200 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Cash } & 1,000 & \\
• \hline \text { Notes payable } & & 1,200 \\
• \hline \text { Interest expense } & & 200 \\
• \hline
• \end{array}\]