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In payment of an open account, Kit-Kat Corporation issued a $5,000, 4%, 3-month note to Ruth Ltd. on July 1. Interest is due at maturity.

In payment of an open account, Kit-Kat Corporation issued a $5,000, 4%, 3-month note to Ruth Ltd. on July 1. Interest is due at maturity. On Oct 1, Kit-Kat sent notification to Ruth that Kit-Kat is unable to honour the note at this time and will pay at a later date. The fiscal year end for both companies is December 31. The journal entry recorded by Kit-Kat Corporation on Oct 1 should include:

Question 26 options:

Notes Payable

5,000

Interest Payable

200

Accounts Payable

5,200

Notes Payable

5,000

Interest Payable

50

Accounts Payable

5,050

Accounts Payable

5,000

Notes Payable

5,000

Notes Payable

5,000

Accounts Payable

5,000

None of the above

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