Question

New Microsoft Word Document Review View Help Search - 21 AoBbccdd Aabbccbd AaBba AaBbc AaB Aabbcc Abod Abbcod 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em.. Emphasis Paragraph Styles A business borrowed $52,936 on March 1 of the current year by signing a 30 day, 12% interest bearing note. Assuming a 360-day year, when the note is paid on March 31, the entry to record the payment should include a debit to Interest Payable for $529 debit to Interest Expense for $529 credit to Cash for $52,936 credit to Cash for $59,288 (Ctrl) -

Answer 1

Interest on note = $52936*12%*30 days/360 days
	=$529
The journal entry for repayment of note would be
Date	Account Title	Debit	Credit
31-Mar	Interest Expenses	529
	Note Payable	52936
	Cash		53465
	( to record repayment of note payable)
Correct Option: SECOND
	debit to Interest Expense For $529