Assume that on May 31st, AI Sawadi LLC asks to extend its past-due OMR 2000 account payable to Baraka LLCC. After some negotiations, Baraka LLC agrees to accept OMR 500 cash and a 60-day, 10%, OMR 1500 note payable to replace the account payable. From the following given options choose the correct journal entry to be recorded in the books of Al Sawadi LLC at the time of note payable on due date. (Note: Assume 360 days in a year) a. Dr Note payable A/C OMR 1500 Dr interest expenses A/C OMR 150 and Cr Cash OMR OMR 1650 b. Dr Note payable A/C OMR 1500 Dr interest expenses A/C OMR 25 and Cr Cash OMR OMR 1525 c. None of the given options d. Dr Cash OMR OMR 1525 and Cr Note payable A/C OMR 1500 Cr interest expenses A/C OMR 25
Assume that on May 31st, AI Sawadi LLC asks to extend its past-due OMR 2000 account payable to Baraka LLCC. After some negotiations, Baraka LLC agrees to accept OMR 500 cash and a 60-day, 10%, OMR 1500 note payable to replace the account payable. From the following given options choose the correct journal entry to be recorded in the books of Al Sawadi LLC at the time of note payable on due date. (Note: Assume 360 days in a year) a. Dr Note payable A/C OMR 1500 Dr interest expenses A/C OMR 150 and Cr Cash OMR OMR 1650 b. Dr Note payable A/C OMR 1500 Dr interest expenses A/C OMR 25 and Cr Cash OMR OMR 1525 c. None of the given options d. Dr Cash OMR OMR 1525 and Cr Note payable A/C OMR 1500 Cr interest expenses A/C OMR 25
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that on May 31st, AI Sawadi LLC asks to extend its past-due OMR 2000 account payable to Baraka LLCC. After some negotiations, Baraka LLC agrees to accept OMR 500 cash and a 60-day, 10%, OMR 1500 note payable to replace the account payable. From the following given options choose the correct journal entry to be recorded in the books of Al Sawadi LLC at the time of note payable on due date. (Note: Assume 360 days in a year)
a. Dr Note payable A/C OMR 1500 Dr interest expenses A/C OMR 150 and Cr Cash OMR OMR 1650
b. Dr Note payable A/C OMR 1500 Dr interest expenses A/C OMR 25 and Cr Cash OMR OMR 1525
c. None of the given options
d. Dr Cash OMR OMR 1525 and Cr Note payable A/C OMR 1500 Cr interest expenses A/C OMR 25
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