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

Notes payable refer to a written agreement between two parties. Under this agreement, the lender…

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

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

Section: Chapter Questions

Problem 1Q

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