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Help Save & Exit On April 12, Hong Company agrees to accept a 60-day, 7%, $9,600 note from Indigo Company to extend the due d
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Answer #1

Correct answer--------------Debit notes payable $9600, debit interest expense $112, Credit cash $9712

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Entry will look like this

General Journal Debit Credit
Notes payable $        9,600
Interest expense ((9600 x 7%)/360 x 60) $           112
Cash $        9,712

Interest will be for 60 days . Cash paid includes notes payable liability and interest accrued on note.

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