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On November 1, 2016, Cherry Industries, which uses a calendar year as its fiscal year, signs a $12,000, 7%, six-month note payable. Journalize the entry to record the payment of the note and entire interest on May 1, 2017.

Respuesta :

Answer: please check the explanation section

Explanation:

note payable = 12000

interest expense = 12000 x 7/100= 840 x 6/12 = 420.

The journal entry for the payment of the 7 % note payable liability on 1 May 2017

Dr Interest Expense 420

Dr Notes Payable       12000

Cr         Bank                         12420