Questions: Select all that apply On November 1, Year 1, ABC Corp. borrowed 100,000 cash on a 1-year, 6% note payable that requires ABC to pay both principal and interest on October 31, Year 2. The journal entry on November 1, Year 1 would include which of the following? Debit to Interest Expense 6,000 Credit to Note Payable 106,000 Credit to Note Payable 100,000 Debit to Cash 100,000

The correct entries for the journal on November 1, Year 1, when ABC Corp. borrows $100,000 on a 1-year, 6% note payable, are as follows:

1. Credit to Note Payable $100,000: This is correct. When ABC Corp. borrows money, it incurs a liability, which is recorded as a credit to Note Payable for the amount borrowed, which is $100,000.

2. Debit to Cash $100,000: This is correct. ABC Corp. receives cash from the loan, so it records an increase in its cash account with a debit of $100,000.

Now, let's evaluate the other options:

• Debit to Interest Expense $6,000: This is incorrect. Interest expense is not recorded at the time of borrowing. Instead, it is recognized over the life of the note. The interest expense for the year would be recorded periodically, typically at the end of the accounting period.

• Credit to Note Payable $106,000: This is incorrect. The note payable should only reflect the principal amount borrowed, which is $100,000. The $6,000 interest is not added to the note payable at the time of borrowing.

In summary, the correct journal entries on November 1, Year 1, are:

• Debit to Cash $100,000
• Credit to Note Payable $100,000