Pegasus Corp

question 104

Multiple Choice

Pegasus Corp. signed a three-month, zero-interest-bearing $323,000 note on November 1, 2019 for the purchase of $250,000 of inventory. If Pegasus makes adjusting entries only at the end of the year, the adjusting entry made at December 31, 2019 will include a ________.

• A) debit to Note Payable for $24,333
• B) debit to Interest Expense for $48,667
• C) credit to Note Payable for $24,333
• D) credit to Interest Expense for $48,667