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Uncle Paul's Gifts 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 $75700 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest? A) Interest Expense 1514          Notes Payable   1514 B) Interest Expense 2271         Interest Payable   2271 C) Interest Expense 1514        Cash   1514 D) Interest Expense 1514          Interest Payable   1514

Uncle Paul's Gifts 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 $75700 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest? A) Interest Expense 1514          Notes Payable   1514 B) Interest Expense 2271         Interest Payable   2271 C) Interest Expense 1514        Cash   1514 D) Interest Expense 1514          Interest Payable   1514

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Uncle Paul's Gifts 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 $75700 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

A)

Interest Expense 1514  
       Notes Payable   1514

B)

Interest Expense 2271  
      Interest Payable   2271

C)

Interest Expense 1514  
     Cash   1514

D)

Interest Expense 1514  
       Interest Payable   1514
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