Bull City Industries
If the note is issued with a 45-day term, journalize the entries to record (refer to the company’s Chart of Accounts for the exact wording of account titles): 1. the issuance of the note on January 1. 2. the payment of the note at maturity on February 15. Assume a 360-day year.

a. Debit: Notes Payable, Credit: Cash; Debit: Interest Expense, Credit: Interest Payable.
b. Debit: Notes Receivable, Credit: Cash; Debit: Interest Revenue, Credit: Interest Receivable.
c. Debit: Cash, Credit: Notes Receivable; Debit: Interest Receivable, Credit: Interest Revenue.
d. Debit: Notes Payable, Credit: Cash; Debit: Interest Payable, Credit: Interest Expense.