Problem
Keith Company paid Major Company for merchandise with an $8,000, 60-day, 9% note dated April 1. If Keith Company pays the note at maturity, what entry should Major make at that time?
|
a.
|
cash
interest income
notes receivable
|
8,720
|
720
8,000
|
|
b.
|
notes payable
interest expense
cash
|
8,000
720
|
8,720
|
|
c.
|
cash
interest income
notes receivable
|
8,120
|
120
8,000
|
|
d.
|
notes payable
interest expense
cash
|
7,880
120
|
8,000
|