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Clark Company paid Sherman Company for merchandise with a $4,000, 60-day, 9% note dated April 1. If Clark Company pays the note at maturity, what entry should Sherman make at that time? Select one: a.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense A) +4,360 -4,000       +360 +360     b.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense B) -4,360     -4,000   -360     +360 c.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense C) +4,060 -4,000       +60 +60     d.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense D) -4,000     -3,940   -60     +60 e. None of the above

Clark Company paid Sherman Company for merchandise with a $4,000, 60-day, 9% note dated April 1. If Clark Company pays the note at maturity, what entry should Sherman make at that time? Select one: a.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense A) +4,360 -4,000       +360 +360     b.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense B) -4,360     -4,000   -360     +360 c.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense C) +4,060 -4,000       +60 +60     d.     BALANCE SHEET INCOME STATEMENT   ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY REVENUE - EXPENSE   Cash Notes Receivable   Notes Payable   Retained Earnings Interest Income   Interest Expense D) -4,000     -3,940   -60     +60 e. None of the above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Clark Company paid Sherman Company for merchandise with a $4,000, 60-day, 9% note dated April 1. If Clark Company pays the note at maturity, what entry should Sherman make at that time?

Select one:
a.
    BALANCE SHEET INCOME STATEMENT
  ASSETS = LIABILITIES + STOCKHOLDER'S
EQUITY		 REVENUE - EXPENSE
  Cash Notes
Receivable		   Notes
Payable		   Retained Earnings Interest
Income		   Interest
Expense
A) +4,360 -4,000       +360 +360    
b.
    BALANCE SHEET INCOME STATEMENT
  ASSETS = LIABILITIES + STOCKHOLDER'S
EQUITY		 REVENUE - EXPENSE
  Cash Notes
Receivable		   Notes
Payable		   Retained Earnings Interest
Income		   Interest
Expense
B) -4,360     -4,000   -360     +360
c.
    BALANCE SHEET INCOME STATEMENT
  ASSETS = LIABILITIES + STOCKHOLDER'S
EQUITY		 REVENUE - EXPENSE
  Cash Notes
Receivable		   Notes
Payable		   Retained Earnings Interest
Income		   Interest
Expense
C) +4,060 -4,000       +60 +60    
d.
    BALANCE SHEET INCOME STATEMENT
  ASSETS = LIABILITIES + STOCKHOLDER'S
EQUITY		 REVENUE - EXPENSE
  Cash Notes
Receivable		   Notes
Payable		   Retained Earnings Interest
Income		   Interest
Expense
D) -4,000     -3,940   -60     +60
e. None of the above
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