What is the debtor's entry to record a note paid, with interest accrued in the previous year (assume there is a reversing entry)?
A) Debit Cash; credit Interest Receivable; credit Notes Receivable; credit Interest Income
B) Debit Notes Payable; debit Interest Expense; debit Interest Payable; credit Cash
C) Debit Cash; credit Interest Income; credit Notes Receivable
D) Debit Notes Payable; debit Interest Expense; credit Cash

Question

Quizplus · Accepted Answer

Debit Notes Payable to remove the liability, debit Interest Expense for the interest incurred in the current year, and credit Cash for the payment made.

What Is the Debtor's Entry to Record a Note Paid