On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery records the appropriate adjusting entry for the note on December 31, 2021. What amount of cash will be needed to pay back the note payable plus any accrued interest on May 1, 2022? (Do not round your intermediate calculations.)
A) $200,000.
B) $202,000.
C) $204,000.
D) $206,000.
Answer: D
On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2022. Old World Deli records the appropriate adjusting entry for the note on December 31, 2021. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2022?
A) $300,000.
B) $301,250.
C) $306,250.
D) $307,500.
Answer: D
On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery should record which of the following adjusting entries at December 31, 2021? (Do not round your intermediate calculations.)
A) Debit Interest Expense and credit Interest Payable, $2,000.
B) Debit Interest Expense and credit Cash, $2,000.
C) Debit Interest Expense and credit Interest Payable, $6,000.
D) Debit Interest Expense and credit Cash, $6,000.
Answer: A