The journal entry used to record the issuance of a discounted note for the purpose of borrowing funds for the business is A debit Cash and Interest Expense; credit Notes Payable B debit Notes Payable; credit Cash C debit Accounts Payable;credit Notes Payable D debit Cash and Interest Payable; credit Notes Payable

The correct journal entry to record the issuance of a discounted note for borrowing funds is:<br /><br />**D debit Cash and Interest Payable; credit Notes Payable**<br /><br />Here's the explanation:<br /><br />- When a business issues a discounted note, it receives cash less than the face value of the note because the interest is deducted upfront. <br />- The entry involves debiting Cash for the amount received and debiting Interest Payable for the interest that will be paid over the life of the note.<br />- The credit is made to Notes Payable for the face value of the note.<br /><br />This reflects the liability for the full amount of the note while recognizing the interest expense that will accrue over time.