Tangent Company borrowed $100,000 from the bank signing an 8%, 6-month note on September 1. Principal and interest are payable to the bank on March 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on November 30, would be: A) debit Interest Expense, $8,000; credit Interest Payable, $8,000. B) debit Interest Expense, $667; credit Interest Payable, $667. C) No adjusting entry is needed on November 30. D) debit Interest Expense, $2,667; credit Interest Payable, $2,667.
Tangent Company borrowed $100,000 from the bank signing an 8%, 6-month note on September 1. Principal and interest are payable to the bank on March 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on November 30, would be: A) debit Interest Expense, $8,000; credit Interest Payable, $8,000. B) debit Interest Expense, $667; credit Interest Payable, $667. C) No adjusting entry is needed on November 30. D) debit Interest Expense, $2,667; credit Interest Payable, $2,667.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...
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Tangent Company borrowed $100,000 from the bank signing an 8%, 6-month note on September 1. Principal and interest are payable to the bank on March 1. If the company prepares monthly financial statements, the
A) debit Interest Expense, $8,000; credit Interest Payable, $8,000.
B) debit Interest Expense, $667; credit Interest Payable, $667.
C) No adjusting entry is needed on November 30.
D) debit Interest Expense, $2,667; credit Interest Payable, $2,667.
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