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 payment of the note at maturity is

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