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? a) debit interest expense $625; credit interest payable $625.
b) debit notes payable $50,000; credit interest revenue $625; credit cash $49,375.
c) debit cash $50,625; credit notes receivable $50,625.
d) debit notes payable $50,625; credit cash $50,625.
e) debit notes payable $50,000; debit interest expense $625; credit cash $50,625.

E) Debit Notes Payable $50,000; debit Interest Expense $625; credit Cash $50,625.

Explanation:

The journal entry to record upon maturity of the note would be

Note Payable A/c Dr $50,000

Interest Expense A/c Dr $625

                    To Cash A/c $50,625

(Being the maturity of the note is recorded)

The interest expense is computed below:

= Principal × rate of interest × number of days ÷ (total number of days in a year)  

= $50,000 × 5% × (90 days ÷ 360 days)

= $625

We assume the total number of days in a year is 360 days

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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d) social security number

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