Which journal entry below would be properly used to record an issuance of an installment note (borrowing money) from Local Bank on January 1 of this year. The principal of the note is $40,000, interest rate is 6%, terms of the note 5 years, annual payment $9,496. JOURNAL Page 25datedescriptionp.ref.debitCREDIT Jan. 1(1) (2) Group of answer choicesNotes Payable debit $40,000, Cash credit $40,000Cash debit $9,496, Notes Payable credit $9,496Cash debit $40,000, Bonds Payable credit $40,000Cash debit $40,000, Notes Payable credit $40,000

Notes payable are the negotiable instruments used for deferring payments. In this one-party agree to…

Answered: Which journal entry below would be…

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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Which journal entry below would be properly used to record an issuance of an installment note (borrowing money) from Local Bank on January 1 of this year. The principal of the note is $40,000, interest rate is 6%, terms of the note 5 years, annual payment $9,496.

JOURNAL Page 25

date	description	p.ref.	debit	CREDIT
Jan. 1	(1)
	(2)

Group of answer choices

Notes Payable debit $40,000, Cash credit $40,000

Cash debit $9,496, Notes Payable credit $9,496

Cash debit $40,000, Bonds Payable credit $40,000

Cash debit $40,000, Notes Payable credit $40,000

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