On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What is the journal entry that should be recorded by Watson Enterprises upon signing the note?
A. Debit Accounts Receivable $24,000; credit Notes Receivable $24,000.
B. Debit Notes Payable $24,000; debit Interest Expense $160; credit Cash $24,160.
C. Debit Notes Payable $24,000; debit Interest Expense $160; credit Accounts Payable $24,160.
D. Debit Accounts Payable $24,160; credit Notes Payable $24,160.
E. Debit Accounts Payable $24,000; credit Notes Payable $24,000.
Answer: E
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