On October 1, Sam's Painting Service borrows $150,000 from National Bank on a 3-month, $150,000, 4% note. The entry by Sam's Painting Service to record payment of the note and accrued interest on January 1 isDR Notes Payable 150,000; DR Interest Payable 1,500; CR Cash 151,500DR Notes Payable 151,500; CR Cash 151,500DR Notes Payable 150,000; DR Interest Payable 6,000; CR Cash 156,000DR Notes Payable 150,000; DR Interest Expense 1,500; CR Cash 151,500

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Izabelle Lin · Answer 1

DR Notes Payable 150,000; DR Interest Payable 1,500; CR Cash 151,500

Explanation:

Interest Payable = ($150,000 x. 04) x 3 / 12 = $1,500