Question

On March 1, 2018, Lewis Services issued a 5% long-term notes payable for $25,000. It is payable over a 5-year term in $5,000 principal installments on March 1 of each year, beginning March 1, 2019. Which of the following entries needs to be made on March 1, 2018?

A. Long - Term Notes Payable 25,000
Accounts Payable 25,000
B. Long - Term Notes Payable 5,000
Cash 5,000
C. Cash 25,000
Long - Term Notes Payable 25,000
D. Current Portion of Long - Term Notes Payable 25,000
Long - Term Notes Payable 25,000

Answer 1

C. Cash 25,000

Long - Term Notes Payable 25,000

Step-by-step explanation:

Based on the information given we were told that on MARCH 1, 2018, the company issued a 5% long-term notes payable for the amount of $25,000 which therefore means that the appropriate journal entries that is needed to be made on March 1, 2018 will be:

March 1, 2018

Dr Cash $25,000

Cr Long term notes payable $25,000