Nacron Company Borrowed $15,000 from the Bank Signing a 6

question 133

Multiple Choice

Nacron Company borrowed $15,000 from the bank signing a 6%, 3-month note on October 1, 2021.Principal and interest are payable to the bank on January 1, 2022.If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on October 31, 2021, would be:

• A)debit Interest Expense, $75; credit Interest Payable, $75.
• B)debit Interest Expense, $900; credit Interest Payable, $900.
• C)debit Note Payable, $900; credit Cash, $900.
• D)debit Cash, $75; credit Interest Payable, $75.

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Definitions:

Sharpey Fibers

Thick collagen fibers that anchor periosteum (the outer fibrous layer of bone) to the bone, playing an important role in the attachment of tendons and ligaments to bones.

Periosteum

A dense layer of vascular connective tissue enveloping bones except at the surface of the joints.

Collagen Fibers

Strong, fibrous proteins that make up connective tissues, providing support and strength.

Carpal Bone

One of the eight small bones that make up the wrist (carpus) that connects the hand to the forearm, allowing for the wrist's complex range of movement.