On October 1, 2014, Pennington Company issued a $90,000, 10%, nine-month interest-bearing note. Assuming interest was accrued in June 30, 2015, the entry to record the payment of the note on July 1, 2015, will include a:

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The interest for nine months is $90,000 * 10% * (9/12) = $6,750. Since interest was accrued on June 30, 2015, the entry to record the payment on July 1, 2015, would include a debit to Interest Payable for $6,750 to remove the liability.

On October 1, 2014, Pennington Company Issued a $90,000, 10