Multiple Choice
A gift shop signs a three-month note payable to help finance increases in inventory for the Christmas shopping season.The note is signed on November 1 in the amount of $50000 with annual interest of 6%.What is the adjustment to be made on December 31 for the interest expense accrued to that date if no adjustments have been made previously for the interest?
A) increase Interest Expense $500 increase Interest Payable $500
B) increase Interest Expense $750 increase Interest Payable $750
C) increase Interest Expense $500 decrease Cash $500
D) increase Interest Expense $750 increase Note Payable $750
Correct Answer:
Verified
Correct Answer:
Verified
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