On October 1, Eli's Carpet Service borrows $125,000 from First District Bank on a 3-month, $125,000, 8% note. What entry must Eli's Carpet Service make on December 31 before financial statements are prepared? Select one: a, Interest Expense....... Interest Payable 10,000 10,000 b. Interest Payable........ Interest Expense 2,500 2,500 2,500 C. Interest Expense... Interest Payable.... 2,500 2,500 d. Interest Expense..........-. Notes Payable.... 2,500 ......

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On October 1, Eli's Carpet Service borrows $125,000 from First District Bank on a 3-month,
$125,000, 8% note. What entry mnust Eli's Carpet Service make on December 31 before financial
statements are prepared?
Select one:
a. Interest Expense........
10,000
19,000
Interest Payable
b. Interest Payable.....
Interest Expense
2,500
2,500
2,500
C. Interest Expense.....
Interest Payable...
2,500
d. Interest Expense....
2,500
Notes Payable..
2,500
Transcribed Image Text:On October 1, Eli's Carpet Service borrows $125,000 from First District Bank on a 3-month, $125,000, 8% note. What entry mnust Eli's Carpet Service make on December 31 before financial statements are prepared? Select one: a. Interest Expense........ 10,000 19,000 Interest Payable b. Interest Payable..... Interest Expense 2,500 2,500 2,500 C. Interest Expense..... Interest Payable... 2,500 d. Interest Expense.... 2,500 Notes Payable.. 2,500
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