The entry to record the annual payment on December 31, 2020, by Jones Company is as follows:
Debit Note Payable $15,000
Debit Interest Expense $5,000
Credit Cash $20,000
<h3>How do you record annual payments?</h3>
Annual payments can be recorded by debiting the accounts that receive the value and crediting the account that gives value as above.
<h3>Data Analysis:</h3>
Note Payable = $100,000
Maturity period = 5 years
Date of Issuance = January 1, 2019
Principal repayment plus interest = December 31
Interest rate = 5%
Annual Interest in dollars = $5,000 ($100,000 x 5%)
Note Payable $15,000 Interest Expense $5,000 Cash $20,000
Thus, the entry to record the annual payment on December 31, 2020, by Jones Company is debits to Note Payable ($15,000) and Interest expense ($5,000), and a credit to Cash account ($20,000).
Learn more about recording annual payments at brainly.com/question/14290379
