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coupon rate.
contractual rate.
stated rate.
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
15-