Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a company paid $5000 cash to its bank. the payment

A company paid $5000 cash to its bank. The payment was for $4000 of principal...

90.2K

Verified Solution

Question

Accounting

A company paid $5000 cash to its bank. The payment was for $4000 of principal and $1000 of interest incurred this period. The loan had been taken out to finance the construction of a new piece of production equipment.

What is the correct journal entry?

Dr. Work in Process 1000 Dr. Notes Payable 4000 Cr. Cash 5000

Dr. Work in Process 5000 Cr. Cash 5000

Dr. Equipment 5000 Cr. Cash 5000

Dr. Equipment 1000 Dr. Notes Payable 4000 Cr. Cash 5000

Dr. Interest Expense 1000 Dr. Notes Payable 4000 Cr. Cash 5000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

If a buffer solution is 0 180 M in a weak acid K 6 2...

Biology
1.2K views

Ingestion is the removal of waste food materials from the body True O False A...

Basic Math
1.2K views

y Bookmarks Window IA Outlook D Help Homepage N Homepage diuc r cubtended by t

Accounting
1.2K views

Your answer is partially correct. Presented below are a number of balance sheet...

Accounting
1.2K views

Sunny Corporation has collected the following data for one of its products: A. $5,070 unfavorable...

Accounting
1.2K views

The Rock Company produces basketballs. It incurred the following costs during the year. Direct materials...

Accounting
1.2K views

Transactions - week 1 N Now that you have reviewed information about Spine Tinglers, you...

Accounting
1.2K views

Assume the following information appears in the standard cost card for a business that makes...

Finance
1.2K views

In examining the yield curve for U.S. Treasury securities, we find all of the following...

Finance
1.2K views

KKT complementary slackness states that if com > 0, then (Xn, Yn) is on the...

Accounting
1.2K views

For several years, Herschel Anderson had operated Management Consulting Company as its sole proprietor. On...

Finance
1.2K views

Dominic Monaldo is applying for a loan from a bank. The bank is concerned because...