On January 1, Gemstone Company obtained a $165,000, 7%, 10-year installment note from Guarantee Bank. The note requires annual payments of $23,492, with the first payment occurring on December 31. The first payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry for the issuance of the installment note for cash on January 1 would include a a.credit to Notes Payable for $165,000 b.debit to Interest Expense for $11,550 c.credit to Interest Payable for $11,550 d.debit to Notes Payable for $165,000
On January 1, Gemstone Company obtained a $165,000, 7%, 10-year installment note from Guarantee Bank. The note requires annual payments of $23,492, with the first payment occurring on December 31. The first payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry for the issuance of the installment note for cash on January 1 would include a a.credit to Notes Payable for $165,000 b.debit to Interest Expense for $11,550 c.credit to Interest Payable for $11,550 d.debit to Notes Payable for $165,000
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 11E
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On January 1, Gemstone Company obtained a $165,000, 7%, 10-year installment note from Guarantee Bank. The note requires annual payments of $23,492, with the first payment occurring on December 31. The first payment consists of interest of $11,550 and principal repayment of $11,942. The
a.credit to Notes Payable for $165,000
b.debit to Interest Expense for $11,550
c.credit to Interest Payable for $11,550
d.debit to Notes Payable for $165,000
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