Pegasus Corp. signed a three-month, 6% note on November 1, 2019 for the purchase of $260,000 of inventory. If Pegasus makes adjusting entries only at the end of the year, the adjusting entry made at December 31, 2019 will include a ________. (Do not round any intermediary calculations. Round your final answer to the nearest dollar.)
A) debit to Note Payable for $2,600
B) debit to Interest Expense for $2,600
C) credit to Note Payable for $15,600
D) debit to Interest Expense for $3,900

Question

Quizplus · Accepted Answer

The interest expense for two months (November and December) is calculated as $260,000 * 6% * (2/12) = $2,600.