Answer:
Notes Payable, $10,000
Explanation:
The journal entry when the amount is borrowed is as:
On January 1
Cash A/c.........................Dr $10,000
Notes Payable A/c......Cr $10,000
Being amount borrowed from bank by signing the note
The journal entry which is to be recorded when made payment in full
On March 1
Notes Payable A/c...............................Dr $10,000
Interest A/c............................................Dr $133
Cash A/c..................................................Cr $10,133
Being the amount paid in full
Working Note:
Interest = Amount borrowed × 8% × Days / Number of days
= $10,000 × 8% × 60/365
= $133
