LCO:2The Bank of Southwest agrees to lend Dartsmith Corporation $200,000 on January 1. Dartsmith signs a $200,000, 4%, 9-month note. Interest is due at maturity on September 30.

On January 1, Dartsmith will make which of the following journal entries to record the proceeds and issue of the note?

Account Name Debit Credit

Interest Expense 6,000

Cash 194,000

Notes Payable 200,000

Account Name Debit Credit

Cash 200,000

Interest Expense 6,000

Notes Payable 200,000

Interest Payable 6,000

Account Name Debit Credit

Cash 200,000

Notes Payable 200,000

Account Name Debit Credit

Cash 200,000

Interest Expense 6,000

Notes Payable 206,000