Question

The entry by Ken's Painting Service to record payment of the note and accrued interest on January 1 is

a. Notes Payable 50,500 Cash 50,500
b. Notes Payable 50,000 Interest Payable 500 Cash 50,500
c. Notes Payable 50,000 Interest Payable 2,000 Cash 52,000
d. Notes Payable 50,000 Interest Expense 500 Cash 50,500

Answer 1

The completed question is

On October 1, Ken's Painting Service borrows $50,000 from National Bank on a 3-month, $50,000, 4% note.

The entry by Ken's Painting Service to record payment of the note and accrued interest on January 1 is

B) Notes Payable 50,000

Interest Payable 500

Cash 50,500

Step-by-step explanation:

Base on the scenario been described in the question, the entry by Ken's Painting Service to record payment of the note and accrued interest on January 1 is going to be notes payable 50,000 and interest payable 50,000. Option b is the answer.