Notes Payable Video Lessons

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Problem: ABC Company borrowed on a 6 month, 10% note payable for $5,000 on 10/1/15. Assuming no adjusting entries were made yet, what adjusting entry for interest will they need to make at year end on 12/31? a. Debit: Interest expense $500 and Credit: Interest Payable $500 b. Debit: Interest expense $250 and Credit: Int. Payable $250 c. Debit: Interest receivable $250 and Credit: Int. Income $250 d. Debit: Interest expense $125 and Credit: Interest Pay. $125

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Problem Details

ABC Company borrowed on a 6 month, 10% note payable for $5,000 on 10/1/15. Assuming no adjusting entries were made yet, what adjusting entry for interest will they need to make at year end on 12/31?

a. Debit: Interest expense $500 and Credit: Interest Payable $500

b. Debit: Interest expense $250 and Credit: Int. Payable $250

c. Debit: Interest receivable $250 and Credit: Int. Income $250

d. Debit: Interest expense $125 and Credit: Interest Pay. $125

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