Company a and Company B Each Borrow $2,000 from the Bank.Company

question 61

Multiple Choice

Company A and Company B each borrow $2,000 from the bank.Company A signed a 60-day,12% note.Company B signed a 90-day,11% note.How will each of these companies record these events in their respective general journals on the day the money was borrowed?

• A) Company A
• \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Notes Payable } & & 2,000 \\
• \hline
• \end{array}\] Company B
• \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,000 & \\
• \hline \text { Notes Payable } & & 2,000 \\
• \hline
• \end{array}\] 00 Notes Payableompany record this event in the general journal?
• B) Company A
• \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,040 & \\
• \hline \text { Interest Experse } & & 40 \\
• \hline \text { Notes Payable } & & 2,000 \\
• \hline
• \end{array}\] Company B
• \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,055 & \\
• \hline \text { Interest Experse } & & 55 \\
• \hline \text { Notes Payable } & & 2,000 \\
• \hline
• \end{array}\]
• C) Company A
• \[\begin{array} { | c | r | r | }
• \hline \text { Notes Payable } & 2,000 & \\
• \hline \text { Cash } & & 2,000 \\
• \hline
• \end{array}\] Company B
• \[\begin{array} { | c | r | r | }
• \hline \text { Notes Payable } & 2,000 & \\
• \hline \text { Cash } & & 2,000 \\
• \hline
• \end{array}\]
• D) Company A
• \[\begin{array} { | c | r | r | }
• \hline \text { Interest Expense } & 40 & \\
• \hline \text { Notes Payable } & 2,000 & \\
• \hline \text { Cash } & & 2,040 \\
• \hline
• \end{array}\] Company B
• \[\begin{array} { | c | r | r | }
• \hline \text { Interest Expense } & 55 & \\
• \hline \text { Notes Payable } & \mathbf { 2 , 0 0 0 } & \\
• \hline \text { Cash } & & 2,055 \\
• \hline
• \end{array}\]
• E) . Company A
• \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 2,040 & \\
• \hline \text { Notes Payable } & & 2,040 \\
• \hline
• \end{array}\] Company B
• \[\begin{array} { | l | l | l | }
• \hline \text { Cash } & 2,055 & \\
• \hline \text { Notes Payable } & & 2,055 \\
• \hline
• \end{array}\]

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Definitions:

Mass Media

Forms of communication, such as newspapers, magazines, radio, television, and the internet, that reach large audiences and have a significant influence on public opinion.

War Efforts

National campaigns and initiatives undertaken to mobilize resources, including military and civilian contributions, toward the success in a time of war.

Core American Values

Fundamental beliefs and principles that are widely held and shared among the American population, such as freedom, equality, and democracy.

Gross Profit

Income after deducting only the cost of goods sold from revenue, indicating the efficiency of a company's production process.