Problem: On July 1, R Company borrowed $250,000 cash by signing a 10-year, 8% installment note requiring equal payments each June 30 of $37,258. What is the appropriate journal entry to record the issuance of the note? a) Debit Cash $250,000; debit Interest Expense $37,258; credit Notes Payable $287,258. b) Debit Notes Payable $250,000; credit Cash $250,000. c) Debit Cash $37,258; credit Notes Payable $37,258. d) Debit Cash $250,000; credit Notes Payable $250,000.

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Problem Details

On July 1, R Company borrowed $250,000 cash by signing a 10-year, 8% installment note requiring equal payments each June 30 of $37,258. What is the appropriate journal entry to record the issuance of the note?

a) Debit Cash $250,000; debit Interest Expense $37,258; credit Notes Payable $287,258.

b) Debit Notes Payable $250,000; credit Cash $250,000.

c) Debit Cash $37,258; credit Notes Payable $37,258.

d) Debit Cash $250,000; credit Notes Payable $250,000.

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