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

This answer is hidden. It contains 119 characters.