Question

A company lends its supplier $150,000 for 3 years at a 6% annual interest rate. Interest payments are to be made twice a year. The entry to record this lending transaction includes a debit to:

A) Notes Receivable and a credit to Cash for $150,000.

B) Cash and a credit to Notes Payable for $150,000.

C) Cash and a credit to Interest Revenue for $9,000.

D) Interest Receivable and a credit to Interest Revenue for $4,500.

Answer

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