A Firm Purchased Equipment for $16,000 on Credit and Issued

Multiple Choice

A firm purchased equipment for $16,000 on credit and issued a 120-day note bearing interest at 9 percent as evidence of the debt. The journal entry to record this transaction is

A) debit Equipment for $16,000 and credit Accounts Payable for $16,000.
B) debit Equipment for $16,480 and credit Notes Payable for $16,480.
C) debit Equipment for $16,000, and credit Notes Payable for $16,000.
D) Equipment for $16,000, debit Interest Expense for $1,440, and credit Notes Payable for
$17,440.