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On April 12, Hong Company agrees to accept a 60-day, 9%, $7,200 note from Indigo Company to extend the due date on an overdue account. What is the journal entry that Indigo Company would make, when it records payment of the note on the maturity date? (Use 360 days a year.) A) Debit Cash $7,308; credit Interest Revenue $108; credit Notes Receivable $7,200. B) Debit Cash $7,308; credit Interest Revenue $108, credit Notes Payable $7,200. C) Debit Notes Payable $7,200, credit Interest Expense $108, credit Cash $7,092. D) Debit Notes Payable $7,200; debit Interest Expense $162; credit Cash $7,362 E) Debit Notes Payable $7,200; debit Interest Expense $108; credit Cash $7,308.

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3 votes
Answer: the answer is B
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