On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the payment of the note by Jarrett Company on the maturity date?
A. Debit Notes Payable $7,650; credit Cash $7,650.
B. Debit Notes Payable $7,500; credit Interest Expense $150; credit Cash $7,350.
C. Debit Notes Payable $7,500; debit Interest Expense $150; credit Cash $7,650.
D. Debit Cash $7,650; credit Interest Revenue $150; credit Notes Receivable $7,500.
E. Debit Notes Payable $7,500; credit Cash $7,500.
Answer: C
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