Question

On April 12, Hong Company agrees to accept a 60-day, 10%, $5,900 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Indigo Company

Answer 1

Answer and Explanation:

The Journal entry is here below:-

Accounts Payable Dr, $5,900

To Notes payable $5900

(Being the note payable is recorded)

we are debited the accounts payable as it decreased the liabilities and we credited the notes payable as it increased the liabilities in order to do the correct journalizing and posting