Respuesta :
Answer:
Notes payable..........................Dr $12,000
Interest expense......................Dr $360
Cash $12,360
(Being notes payable repaid with interest
on due date)
Explanation:
Note is issued against any payment to be made. Note is repaid with face value and interest.
Given:
Face value of notes payable = $12,000
interest rate = 12%
Time period = 90 days
Calculation of interest expense:
= 12,000 × 0.12 × 90/360
= $360
Journal entry to record repayment of notes payable:
Particulars Debit Credit
Notes payable $12,000
Interest expense $360
Cash $12,360
(Being notes payable
repaid with interest
on due date)
