On March 1, 2018, Lewis Services issued a 6% long-term notes payable for $18,000. It is payable

over a 3-year term in $6000 principal installments on March 1 of each year, beginning March 1, 2019.

Which of the following entries needs to be made on March 1, 2018?

A) Long-Term Notes Payable 6000

Cash 6000

B) Cash 18,000

Long-Term Notes Payable 18,000

C) Current Portion of Long-Term Notes Payable 18,000

Long-Term Notes Payable 18,000

D) Long-Term Notes Payable 18,000

Accounts Payable 18,000

Question

Business

Mylee Avila

1 July, 13:14

On March 1, 2018, Lewis Services issued a 6% long-term notes payable for $18,000. It is payable

over a 3-year term in $6000 principal installments on March 1 of each year, beginning March 1, 2019.

Which of the following entries needs to be made on March 1, 2018?

A) Long-Term Notes Payable 6000

Cash 6000

B) Cash 18,000

Long-Term Notes Payable 18,000

C) Current Portion of Long-Term Notes Payable 18,000

Long-Term Notes Payable 18,000

D) Long-Term Notes Payable 18,000

Accounts Payable 18,000

+2

Answers (1)

Know the Answer?

Reina Blankenship · Answer 1

B) Cash 18,000

Long-Term Notes Payable 18,000

Explanation:

The only records that Lewis Services should make on March 1 regarding the issuing of the long term notes payable are:

Dr Cash 18,000 (since Cash is an asset account, when it increases it should be debited) Cr Long Term Notes Payable 18,000 (since Long Term Notes Payable is an liability account, when it increases it should be credited)