First National Bank agrees to lend $100,000 on September 1, 2014, if Cole Williams Co. signs a $100,000, 12%, four-month note maturing on January 1. Cole Williams Co prepares financial statements on 31/12, the entry at maturity date (Jan 1, 2015) is. O a. Debit both Interest payable 4,000 and Notes payable 100,000 and credit Cash 104,000 O b. Debit both Interest payable 4,000 and Notes payable 100,000 and credit Accounts payable 104,000 O c. Debit each of Interest payable 3,000, Interest expense 1,000 and Notes payable 100,000 and credit Cash 104,000 O d. Debit both Interest expense 4,000 and Notes payable 100,000 and credit Cash 104,000

First National Bank agrees to lend $100,000 on September 1, 2014, if Cole Williams Co. signs a $100,000, 12%, four-month note maturing on January 1. Cole Williams Co prepares financial statements on 31/12, the entry at maturity date (Jan 1, 2015) is. O a. Debit both Interest payable 4,000 and Notes payable 100,000 and credit Cash 104,000 O b. Debit both Interest payable 4,000 and Notes payable 100,000 and credit Accounts payable 104,000 O c. Debit each of Interest payable 3,000, Interest expense 1,000 and Notes payable 100,000 and credit Cash 104,000 O d. Debit both Interest expense 4,000 and Notes payable 100,000 and credit Cash 104,000

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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First National Bank agrees to lend $100,000 on September 1, 2014, if Cole
Williams Co. signs a $100,000, 12%, four-month note maturing on January 1. Cole
Williams Co prepares financial statements on 31/12, the entry at maturity date
(Jan 1, 2015) is.
a. Debit both Interest payable 4,000 and Notes payable 100,000 and credit
Cash 104,000
b. Debit both Interest payable 4,000 and Notes payable 100,000 and credit
Accounts payable 104,000
O c. Debit each of Interest payable 3,000, Interest expense 1,000 and Notes
payable 100,000 and credit Cash 104,000
d. Debit both Interest expense 4,000 and Notes payable 100,000 and credit
Cash 104,000

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