On November 1, 2017, Green Corp. purchased equipment by signing a 5-month, 7% note for $120,000. The December 31, 2017 adjusting entry required in connection with this note is
A. debit Interest Expense and credit Interest Payable, $8,400.
B. debit Interest Expense and credit Interest Payable, $3,500.
C. debit Interest Expense and credit Interest Payable, $1,400.
D. debit Interest Expense and credit Cash, $1,400.
Answer:C
On November 1, 2017, Green Corp. purchased equipment by signing a 5-month, 7% note for $120,000. The December 31, 2017 adjusting entry required in connection with this note is
A. debit Interest Expense and credit Interest Payable, $8,400. B. debit Interest Expense and credit Interest Payable, $3,500. C. debit Interest Expense and credit Interest Payable, $1,400. D. debit Interest Expense and credit Cash, $1,400.