A company repays a \$150,000, 10% 9-month note payable at maturity, including all accrued interest. What is the correct journal entry?

• A. Debit Notes Payable \$161,250; Credit Cash \$161,250.
• B. Debit Notes Payable \$150,000; Debit Interest Expense \$11,250; Credit Cash \$161,250.
• C. Debit Interest Expense \$11,250; Credit Notes Payable \$150,000; Credit Cash \$161,250.
• D. Debit Cash \$161,250; Credit Notes Payable \$150,000; Credit Interest Expense \$11,250.

Answer: (B)