On 1 October, Simon's Solar Service borrows $150,000 from Statewide Bank on a 3 month, 4% note.
-The entry by Simon's Solar Service to record payment of the note and accrued interest on 1 January is:

Question

Quizplus · Accepted Answer

The correct entry is a debit to Notes payable for the value of the note to record the release of the liability; a debit to interest payable to record the release of the interest liability and lastly a credit to cash to record the payment to the Bank.

On 1 October, Simon's Solar Service Borrows $150,000 from Statewide