On September 1, 2012, Daylight Donuts signed a $200,000, 8%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2013. Daylight Donuts records the appropriate adjusting entry for the note on December 31, 2012. In recording the payment of the note plus accrued interest at maturity on March 1, 2013, Daylight Donuts woulda. Debit interest expense, $5,333.b. Debit interest payable, $2,667.c. Debit interest expense, $2,667.d. Debit interest expense, $8,000.

Respuesta :

Answer:

Option (c) is correct.

Explanation:

The journal entry is as follows:

On March 1, 2013

Interest expense A/c Dr. $2,667

      To interest payable               $2,667

(To record the payment of the note plus accrued interest at maturity on March 1, 2013)

Working notes:

Interest expense:

= $200,000 × 8% × (2/12)

= $200,000 × 0.08 × 0.167

= $2,667