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Baden Industries Borrows $20000 at 7% Annual Interest for Six

Question 172

Multiple Choice

Baden Industries borrows $20000 at 7% annual interest for six months on October 1 2022.Which is the appropriate adjustment to accrue interest if Baden employs a December 31 2022 fiscal year?


A) Increase Interest Expense $350 Increase Interest Payable $350
B) Increase Interest Expense $1400 Increase Interest Payable $1400
C) Increase Interest Expense $350 Decrease Notes Payable $350
D) Decrease Notes Payable $1400 Increase Interest Payable $1400

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