Use the following information for item 40 and 41.On January 1, 2020, Golden Rams Company borrowed $100,000 from Albany StateBank and signed a five-year, 10% installment note. The note requires annualpayments of $26,378, beginning on December 31, 2020. This payment consists ofprincipal of $16,378 and interest of $10,000.The journal entry on December 31 would consist of a debit to Notes Payable for$10,000, debit to Interest Expense for $16,378, and a credit to Cash for $26,378.TrueFalse

Notes payable: Notes payable can be defined as the promissory note in which one party promises other…

Answered: The journal entry on December 31 would…

The journal entry on December 31 would consist of a debit to Notes Payable for $10,000, debit to Interest Expense for $16,378, and a credit to Cash for $26,378. True False

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Use the following information for item 40 and 41.
On January 1, 2020, Golden Rams Company borrowed $100,000 from Albany State
Bank and signed a five-year, 10% installment note. The note requires annual
payments of $26,378, beginning on December 31, 2020. This payment consists of
principal of $16,378 and interest of $10,000.
The journal entry on December 31 would consist of a debit to Notes Payable for
$10,000, debit to Interest Expense for $16,378, and a credit to Cash for $26,378.
True
False

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