Green Ski Equipment Company borrowed $6000 from Jackson County Community Bank on November 1 by issuing a 12% 3-month note.Prior to adjustment at the end of the month the company's records included the following tabular analysis:

\begin{array}{llcc} \underline{\text { Assets } } &= & \underline{\text { Liabilities }} &+\underline{ \text { Stockholders' Equity} }\end{array}

\begin{array}{c}\begin{array}{lll}\\\\\text {Bal.}\\\hline \text {Dec. 31}\\\hline \text {Adj. Bal.}\\\hline \end{array}\begin{array}{l}\\\underline{\text { Cash }}=\\7,500 \\\hline \\\hline \\\hline\end{array}\begin{array}{c}\text {Interest}\\\underline{\text { Payable }}+\\\\\hline\\\hline\\\hline \end{array}\begin{array}{c}\text {Notes}\\\underline{\text {Payable}}+\\6,000\\\hline\\\hline\\\hline\end{array}\begin{array}{c}\text {common}\\ \underline{\text {Stock}}+\\\\\hline\\\hline\\\hline\end{array}\begin{array}{l}\\\underline{\text {Revenue }} -\\\\\hline-2\\\hline-2\\\hline \end{array}\begin{array}{lll}\text { Supplies }\\\underline{\text {Expense}} \\\\\hline \\\hline \\\hline\end{array}\end{array}

The adjusting entry at December 31 will include
A)an increase to Notes Payable of $180.
B)a decrease to Cash of $120.
C)an increase to Interest Expense of $120.
D)an increase to Interest Payable of $180.

Which Statement Is Correct

Multiple Choice

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