Claire Had Previously Purchased Inventory from Jamie for $20 000

question 53

Multiple Choice

Claire had previously purchased inventory from Jamie for $20 000. On 1 August Claire gave Jamie a 60-day bill of exchange to cover the amount of the account payable plus interest at 10% p.a. The correct accounting entry in Claire's books to record the settlement of the bill at maturity is:

• A) DR Bills payable $20 329; CR Interest expense $329; CR Bank $20 000.
• B) DR Bills payable $20 000; CR Bank $20 000
• C) DR Bills payable $19 671; DR Interest expense $329; CR Bank $20 000
• D) DR Bills payable $20 329; DR Interest expense $329; CR Bank $20 329; CR Unexpired interest $329

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