On November 1, Alan Company signed a 120-day, 9% note payable, with a face value of $48,000. Alan made the appropriate year-end accrual. What is the journal entry as of March 1 to record the payment of the note assuming no reversing entry was made? (Use 360 days a year.)
A. Debit Cash $48,720; credit Notes Payable $48,720.
B. Debit Notes Payable $49,440; credit Interest Payable $720; credit Interest Expense $720; credit Cash $48,000.
C. Debit Notes Payable $48,000; debit Interest Expense $1440; credit Cash $49,440.
D. Debit Notes Payable $48,000; debit Interest Payable $720; credit Cash $48,720.
E. Debit Notes Payable $48,000; debit Interest Payable $720; debit Interest Expense $720; credit Cash $49,440.
Answer: E
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