Use This Information to Answer the Following Question $\$ 25,000$

question 108

Multiple Choice

Use this information to answer the following question. The transactions below pertain to Broyer Company,whose fiscal year ends September 30.
Sept. 10 Received cash for a 90-day, 12 percent, $\$ 25,000$ note payable. Interest is in adclition to the face value.
30 Made end-of-year adjusting entry to accrue interest expense.
The entry to record the September 10 transaction (amounts rounded) is:

• A)
• \[\begin{array} { l c }
• \text { Cash } & 740 \\
• \text { Notes Payable } && 740
• \end{array}\]
• B)
• \[\begin{array} { l l l }
• \text { Cash } & 24,260 \\
• \quad \text { Accounts receivable } & & 24,260
• \end{array}\]
• C)
• \[\begin{array} { l c }
• \text { Cash } & 24,260 \\
• \text { Notes Payable } &&24,260
• \end{array}\]
• D)
• \[\begin{array} { l r }
• \text { Cash } & 25,000 \\
• \quad \text { Notes Payable } && 25,000
• \end{array}\]

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Definitions:

Financial Reporting

Generating documents that communicate a company's economic situation to its leadership, shareholders, and regulatory agencies.

External Decision Makers

Individuals or organizations outside of a company (e.g., investors, creditors, regulators) who use the company’s financial information to make decisions about engaging with the company.

Common Stock

Represents ownership shares in a corporation, giving shareholders the right to vote on corporate matters and to receive dividends.

Additional Paid-in Capital

The amount of money that shareholders have invested in a company in excess of the nominal or par value of the shares.