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What entry should major make at that time

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Reference no: EM131893163

Problem

Keith Company paid Major Company for merchandise with an $8,000, 60-day, 9% note dated April 1. If Keith Company pays the note at maturity, what entry should Major make at that time?

a.

cash
          interest income
         notes receivable

8,720

720

8,000

b.

notes payable
interest expense
          cash

8,000

720

8,720

c.

cash
          interest income
          notes receivable

8,120

120

8,000

d.

notes payable
interest expense
          cash

7,880

120

8,000

Reference no: EM131893163

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