Johnson Issues a $5,000,7%,100-Day Promissory Note to Adam on November

question 86

Multiple Choice

Johnson issues a $5,000,7%,100-day promissory note to Adam on November 1.What is the adjusting entry made by Johnson on December 31 to recognize the interest (using a 360-day year) ?

• A)Debit Interest Expense;credit Interest Payable for $58.33
• B)Debit Interest Expense;credit Interest Payable for $97.22
• C)Debit Interest Receivable;credit Interest Income for $58.33
• D)Debit Interest Receivable;credit Interest Income for $97.22

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