A Company Accepts a 90-Day, 9 Percent, $1,200 Note from One

Multiple Choice

A company accepts a 90-day, 9 percent, $1,200 note from one of its customers on June 15 in settlement of its account. Which of the following journal entries records the payment at maturity in the customer's general journal form? Assume a 360-day year.

A) Debit Accounts Payable by $1,227; credit Cash by $1,227
B) Debit Notes Payable by $1,200, debit Interest Expense by $27; credit Cash by $1,227
C) Debit Notes Payable by $1,227; credit Cash by $1,227
D) Debit Accounts Payable by $1,227, credit Cash by $1,200; credit Interest Expense by $27