On January 1, Ajax Corp accepted a one-year note for $50,000 at 5% from one of its customers. When the note matured on December 31, the customer was unable to pay, and the company recorded the dishonor. The amount of the debit in the dishonor entry would be:
A)$47,500.
B)$2,500.
C)$50,000.
D)$52,500.

Question

Quizplus · Accepted Answer

The debit in the dishonor entry would be the total amount due, which includes the principal of $50,000 and the interest of $2,500 (5% of $50,000), totaling $52,500.

On January 1, Ajax Corp Accepted a One-Year Note for $50,000