Question
Jane and Bart organized food truck business- Just Best Food Inc (JBF Inc.). JBF Inc. decided to follow accrual method of accounting. JBF Inc. borrowed
Jane and Bart organized food truck business- Just Best Food Inc (JBF Inc.). JBF Inc. decided to follow accrual method of accounting. JBF Inc. borrowed $8,000 from the bank on November 1, 2015. The note had a 5 percent annual rate of interest and matured on April 30, 2016. Yes, it was a short-term debt. Interest and principal were paid in cash on the maturity date.
On November 1st JBF Inc should record $8,000:
- A. Cash (Assets) increase and Equity increase
- B. Cash (Assets) increase and Liability decrease
- C. Cash (Assets) increase and Liability increase
- D. Cash (Assets) decrease and Liability increase
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Research Methods In Accounting
Authors: Malcolm Smith
5th Edition
1526490676, 978-1526490674
