The journal entry that indigo company would make, when it records payment of the note on the maturity date is 8400
An entry in your journal serves as a record of a transaction in your company's books. Every transaction in double-entry bookkeeping requires at least two journal entries.
Dr. Payable Notes 8400
140 Dr. Interest expense
Money Cr 8540
Explanation:
Based on the information given if On April 12, the Hong Company agrees to accept a 60-day which include the amount of $8400 note from Indigo Company which means that in order to extend the due date on an overdue account the journal entry that Indigo Company would make, when it records payment of the note on the maturity date is :
Dr. Payable Notes 8400
Dr Interest expense 140
(8400/60 days) =140
Cr Cash 8540
(8400+140) = 8540
The journal entry that indigo company would make, when it records payment of the note on the maturity date is 8400
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