A company borrows $15,000 on November 1, 2019, giving a 6%, 90-day note payable. The adjusting entry on December 31, 2019, would include a:
A)credit to Interest Payable for $73.97.
B)credit to Interest Payable for $147.95.
C)debit to Interest Expense for $221.92.
D)credit to Cash for $147.95.

Question

Quizplus · Accepted Answer

The interest for 60 days (November 1 to December 31) is calculated as $15,000 * 6% * (60/360) = $147.95. This amount is credited to Interest Payable.

A Company Borrows $15,000 on November 1, 2019, Giving a 6