Baden Industries Borrows $20,000 at 7% Annual Interest for Six

question 3

Multiple Choice

Baden Industries borrows $20,000 at 7% annual interest for six months on October 1, 2022.Which is the appropriate entry to accrue interest if Baden employs a December 31, 2022, fiscal year?

• A)Dr Interest Expense $350 Cr Interest Payable $350
• B)Dr Interest Expense $1,400 Cr Interest Payable $1,400
• C)Dr Interest Expense $350 Cr Notes Payable $350
• D)Dr Notes Payable $1,400 Cr Interest Payable $1,400

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Definitions:

Centralized Power

A form of governance in which all major decisions and authority are concentrated in a central government or authority figure.

Direct Democracy

A form of democracy in which people directly decide on policy initiatives without intermediary representatives or officials.

Fort Sumter

A federal fort in Charleston Harbor, South Carolina, notable for the first shots of the American Civil War being fired there in 1861.

Charleston Harbor

a notable body of water located in South Carolina, known historically for its strategic importance during both the American Revolution and the Civil War.