Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1. Brickyard signs a $200,000, 4%, 9-month note. Interest is due at maturity on September 30. The company's fiscal year ends June 30 and adjusting entries are recorded at that time only. What adjusting entry should Brickyard make on June 30 before preparing its annual financial statements? Multiple Choice Debit Interest Expense and credit Interest Payable for $4,000. Debit Cash and credit Interest Payable for $4,000. Debit Cash and credit Interest Expense for $4,000. Debit Interest Payable and credit Interest Expense for $4,000.
Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1. Brickyard signs a $200,000, 4%, 9-month note. Interest is due at maturity on September 30. The company's fiscal year ends June 30 and adjusting entries are recorded at that time only. What adjusting entry should Brickyard make on June 30 before preparing its annual financial statements? Multiple Choice Debit Interest Expense and credit Interest Payable for $4,000. Debit Cash and credit Interest Payable for $4,000. Debit Cash and credit Interest Expense for $4,000. Debit Interest Payable and credit Interest Expense for $4,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Travis County Bank agrees to lend Brickyard Corporation $200,000 on January 1.
Brickyard signs a $200,000, 4%, 9-month note. Interest is due at maturity on
September 30. The company's fiscal year ends June 30 and adjusting entries are
recorded at that time only. What adjusting entry should Brickyard make on June
30 before preparing its annual financial statements? Multiple Choice Debit
Interest Expense and credit Interest Payable for $4,000. Debit Cash and credit
Interest Payable for $4,000. Debit Cash and credit Interest Expense for $4,000.
Debit Interest Payable and credit Interest Expense for $4,000.
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