On September 1,Knack Company Signed a $50,000,90-Day,5% Note Payable with Central

Multiple Choice

On September 1,Knack Company signed a $50,000,90-day,5% note payable with Central Savings Bank.What is the journal entry that should be recorded by Knack upon maturity of the note? (Use 360 days a year.)

A) Debit Interest Expense $625; credit Interest Payable $625.
B) Debit Notes Payable $50,000; credit Interest Revenue $625; credit Cash $49,375.
C) Debit Cash $50,625; credit Notes Receivable $50,625.
D) Debit Notes Payable $50,625; credit Cash $50,625.
E) Debit Notes Payable $50,000; debit Interest Expense $625; credit Cash $50,625.