On September 1, Presley Guitar Corp borrowed $10,000 from their bank, and signed a 6%, 3-month note. Principal and interest are due on December 1. If Presley prepares monthly financial statements, the adjusting entry that they should prepare for interest on September 30 would be
A) debit Interest Expense, $50; credit Interest Payable, $50.
B) debit Interest Expense, $600; credit Interest Payable, $600.
C) debit Note Payable, $150; credit Cash, $150.
D) debit Cash, $10,000; credit Note Payable, $10,000.
Correct Answer:
Verified
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