Keith Company paid Major Company for merchandise with an $8,000, 60-day, 9% note dated April...
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Accounting
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? (Base your interest calculation on a 360-day year)
a. Cash 8,720 Interest income 720 Notes receivable 8,000
b. Notes payable 8,000 Interest expense 720 Cash 8,720
c. Cash 8,120 Interest income 120 Notes receivable 8,000
d. Notes payable 7,880 Interest expense 120 Cash 8,000
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