Taylor Bank lends Guarantee Company $111,942 on January 1. Guarantee Company signs a $111,942, 8%, 9-month, interest-bearing note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note isa.Cash 111,942 Notes Payable 111,942b.Notes Payable 111,942 Interest Payable 3,359 Cash 111,942 Interest Expense 3,359c.Cash 118,659 Interest Expense 6,717 Notes Payable 111,942d.Interest Expense 6,717 Cash 105,225 Notes Payable 111,942

Notes payable is a negotiable instrument signed by the promisor who agreed to pay a certain amount at a certain date. It is classified under the current liabilities section of the balance sheet.As on Jan 1, only note payable is issued, there will be no interest, and journal entry will be as follows a. Cash 111,942 Notes Payable 111,942

Answered: Taylor Bank lends Guarantee Company…

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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Taylor Bank lends Guarantee Company $111,942 on January 1. Guarantee Company signs a $111,942, 8%, 9-month, interest-bearing note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

Cash		111,942
Notes Payable			111,942

Notes Payable	111,942
Interest Payable	3,359
Cash		111,942
Interest Expense		3,359

Cash	118,659
Interest Expense		6,717
Notes Payable		111,942

Interest Expense	6,717
Cash	105,225
Notes Payable		111,942

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