tb mc qu. 11 - 125 (algo) on april 12, hong company agrees... on april 12, hong company agrees to accept a…

tb mc qu. 11 - 125 (algo) on april 12, hong company agrees... on april 12, hong company agrees to accept a 60 - day, 10%, $6,500 note from indigo company to extend the due date on an overdue account payable. what is the journal entry made by indigo company to record the transaction? multiple choice debit cash $6,500; credit notes payable $6,500. debit notes payable $6,500; credit accounts payable $6,500. debit accounts payable $6,500; credit notes payable $6,500.

tb mc qu. 11 - 125 (algo) on april 12, hong company agrees... on april 12, hong company agrees to accept a 60 - day, 10%, $6,500 note from indigo company to extend the due date on an overdue account payable. what is the journal entry made by indigo company to record the transaction? multiple choice debit cash $6,500; credit notes payable $6,500. debit notes payable $6,500; credit accounts payable $6,500. debit accounts payable $6,500; credit notes payable $6,500.

Answer

Brief Explanations:

Indigo Company is replacing an overdue accounts - payable with a note - payable. Accounts Payable is decreased (debited) and Notes Payable is increased (credited) for the amount of $6,500.

Answer:

Debit Accounts Payable $6,500; credit Notes Payable $6,500.