On October 1 Sam's Painting Service borrows $150000 from National Bank on a 3-month $150000 4% note.Sam's Painting Service's adjustment on December 31 before financial statements are prepared includes a(n)

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The interest for 3 months on a $150,000 note at 4% is $1,500. By December 31, Sam's Painting Service needs to recognize this interest as an expense and a payable, hence an increase to both Interest Expense and Interest Payable for $1,500.

On October 1 Sam's Painting Service Borrows $150000 from National