On March 1, 2018, Lewis Services issued a 6% long-term notes payable for $18,000. It is payableover a 3-year term in $6000 principal installments on March 1 of each year, beginning March 1, 2019. Which of the following entries needs to be made on March 1, 2018? A) Long-Term Notes Payable 6000Cash 6000B) Cash 18,000Long-Term Notes Payable 18,000C) Current Portion of Long-Term Notes Payable 18,000Long-Term Notes Payable 18,000D) Long-Term Notes Payable 18,000Accounts Payable 18,000

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21 October, 15:59

On March 1, 2018, Lewis Services issued a 6% long-term notes payable for $18,000. It is payableover a 3-year term in $6000 principal installments on March 1 of each year, beginning March 1, 2019. Which of the following entries needs to be made on March 1, 2018? A) Long-Term Notes Payable 6000Cash 6000B) Cash 18,000Long-Term Notes Payable 18,000C) Current Portion of Long-Term Notes Payable 18,000Long-Term Notes Payable 18,000D) Long-Term Notes Payable 18,000Accounts Payable 18,000

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Dalton Ferguson · Answer 1

B) Cash A/c Dr $18,000

To Long-Term Notes Payable $18,000

Explanation:

Since we have to pass the journal entry for the beginning year, so we have to record the issued amount also,

The journal entry is shown below:

Cash A/c Dr $18,000

To Long-Term Notes Payable $18,000

(Being long term notes payable)

The principal installment amount should not be considered in the recording of the journal entry. Hence, it is ignored.