On September 1, 2016, a company issued a $50,000, 6-month, 9% note payable to purchase equipment. At December 31, 2016, the company records an adjusting entry to accrue interest incurred by not paid. The company pays the note with interest at the maturity date.
Use the information above to answer the following question. What is the entry to record the payment of interest at the maturity date of the note?
Debit Notes Payable for $50,000, debit Interest Expense for $4,500, and credit Cash for $54,500
Debit Interest Expense for $2,250 and credit Cash for $2,250
Debit Interest Expense for $2,000, debit Interest Payable for $2,500, and credit Cash for $4,500
Debit Interest Payable for $1,500, debit Interest Expense for $750, and credit Cash for $2,250
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