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Question 22

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On October 1, Eli's Carpet Service borrows $125,000 from First National Bank on a 3-month, $125,000, 8% note. The entry by Eli's Carpet Service to record payment of the note and accrued interest on January 1 is a. b. Cash.............................................................................. 127,500 c. Notes Payable........................................................................ 125,000 Interest Payable..................................................................... 10,000 Cash.............................................................................. 135,000 d. Notes Payable........................................................................ 125,000 Interest Expense.................................................................... 2,500 Cash.............................................................................. 127,500

Select one:

a. Notes Payable..........................................125,000 Interest Payable..................................... 2,500 Cash.......................................................127,500

b. Notes Payable..............................................127,500 Cash........................................................ 127,500

c. Notes Payable................................... 125,000 Interest Payable............................... 10,000 Cash..................................... 135,000

d. Notes Payable....................................125,000 Interest Expense.............................. 2,500 Cash.................................................. 127,500