A Business Borrowed $40,000 on March 1 of the Current

question 119

Multiple Choice

A business borrowed $40,000 on March 1 of the current year by signing a 60-day, 9% interest bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

• A) debit to Interest Payable $600
• B) debit to Interest Expense $600
• C) credit to Cash for $40,000
• D) credit to Cash for $46,300