Question

On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note

Answer 1

A journal entry was prepared for KNACK COMPANY that recorded Knack Maturity of Notes.

Step-by-step explanation:

Solution

Given That:

KNACK COMPANY

JOURNAL ENTRY

Date Accounts and Explanation Debit Credit

Sep 01 5% Notes Payable A/C 50000

Interest Expenses A/C (50000*5%*90/360)625

Cash Account 50625

(record maturity of notes payable)

Therefore from the Journal entry, Debit notes payable 50000; Debit Interest Epenses 625; Credit Cash 50625.