On January 1, Gemstone Company obtained a $165,000, 7%, 10-year installment note from Guarantee Bank. The note requires annu payments of $23,492, with the first payment occurring on December 31. The first payment consists of interest of $11,550 and princip repayment of $11,942. The journal entry for the payment would include a Oa. debit to Interest Expense for $23,492 Ob. debit to Cash for $11,942 Oc. debit to Notes Payable for $11,942 Od. credit to Interest Payable for $11,550

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 journal entry for the payment would include a
Oa. debit to Interest Expense for $23,492
Ob. debit to Cash for $11,942
Oc. debit to Notes Payable for $11,942
Od. credit to Interest Payable for $11,550
Transcribed Image Text: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 payment would include a Oa. debit to Interest Expense for $23,492 Ob. debit to Cash for $11,942 Oc. debit to Notes Payable for $11,942 Od. credit to Interest Payable for $11,550
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