Givens Brick Company borrows $300,000 on January 1, and signs an 8%, 9-month not

Question

Givens Brick Company borrows $300,000 on January 1, and signs an 8%, 9-month note, what entry will Givens Brick Company make to pay off the notes payable and interest at maturity assuming that interest has not yet been accrued? DR Interest Expense $18,000 DR Notes Payable $300,000 CR Cash $318,000 O None of the answers are correct DR Notes Payable $300,000 DR Interest Payable $18,000 CR Cash $318,000 O DR Notes Payable $318,000 CR Cash $318,000 O O DR Interest Payable $12,000 DR Notes Payable $300,000 DR Interest Expense $6,000 CR Cash $318,000

Explanation / Answer

Account Titles Debit Credit Interest Expense ($300,000 x 8% x 9/12) $18,000 Notes Payable $300,000 Cash $318,000

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