A Business Makes a Payment of $1440 on a Loan

question 22

Multiple Choice

A business makes a payment of $1440 on a loan payable,consisting of a $110 interest payment and a $1330 principal payment.Which of the following journal entries would be recorded?

• A)Loan payable is credited for $1330,Cash is credited for $110 and Interest expense is debited for $1440.
• B)Cash is credited for $1440,Loan payable is debited for $1330 and Interest expense is debited for $110.
• C)Loan payable is credited for $1440,Cash is debited for $1330 and Interest expense is debited for $110.
• D)Cash is credited for $1330,Interest expense is credited for $110 and Loan payable is debited for $1440.

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