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Question
On October 1, Angelica Inc. signs a note for $200,000 to provide the funds needed to build a new facility. The note is due in 10 years, includes an annual interest rate at 7%, and requires semiannual interest payments each April and October. The journal entry to record the issuance of the promissory note should debit:
A) Notes Payable for $200,000, debit Interest Expense for $14,000, credit Cash for $200,000, and credit Interest Payable for $14,000.
B) Accrued Interest and credit Cash for $14,000.
C) Cash and credit Notes Payable for $200,000.
D) Cash for $200,000, debit Interest Expense for $14,000, credit Notes Payable for $200,000, and credit Interest Payable $14,000.
Answer
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Related questions
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Which of the following statements about straight-line depreciation is correct?
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Which of the following statements most appropriately describes the purpose of depreciating a long-lived tangible asset?
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Under the cost principle, a company capitalizes:
A) all ordinary repair expenditures incurred in the use of an asset.
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Q:
The following information was summarized from the adjusted trial balance of Reliance Yacht Repair, Inc. as of September 30, 2015, the end of the companys fiscal year. Accounts Payable
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500 Retained Earnings
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Part a. Prepare the closing entry for the company for the year ended September 30, 2015.
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Q:
On December 31, 2016, Ditka Inc. had Retained Earnings of $267,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $168,100 and interest revenue of $81,300. The company used supplies in the amount of $87,900, advertising expenses were $16,400, salaries and wages totaled $18,300, and income tax expense was calculated as $13,700. During the year, the company declared and paid dividends of $6,000.
Required:
Part a. Prepare the closing entries dated December 31, 2016.
Part b. Draw a T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entries, and then determine the ending balance.