effective rate.
14Multiple Choice Question 78
On October 1, Steve’s Carpet Service borrows $250,000 from First
National Bank on a 3-month, $250,000, 8% note. The entry by Steve’s
Carpet Service to record payment of the note and accrued interest on
January 1 is
Notes Payable 255,000
Cash 255,000
Notes Payable 250,000
Interest Payable 5,000
Cash 255,000
Notes Payable 250,000
Interest Payable 20,000
Cash 270,000
Notes Payable 250,000
Interest Expense 5,000
Cash 255,000
15Multiple Choice Question 61
Most companies pay current liabilities
by creating long-term liabilities.