Raxon Company Borrowed $50,000 from the Bank Signing a 6

question 74

Multiple Choice

Raxon Company borrowed $50,000 from the bank signing a 6%, 3-month note on September 1.Principal and interest are payable to the bank on December 1.If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be:

• A)debit Interest Expense, $3,000; credit Interest Payable, $3,000.
• B)debit Interest Expense, $250; credit Interest Payable, $250.
• C)debit Note Payable, $3,000; credit Cash, $3,000.
• D)debit Cash, $750; credit Interest Payable, $750.

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Definitions:

Democratic Republic

A form of government where supreme power lies with citizens who vote for representatives to make laws and policies on their behalf, combining elements of democracy and republicanism.

Totalitarianism

A political system where the state recognizes no limits to its authority and strives to regulate every aspect of public and private life.

Authoritarianism

A form of government characterized by strong central power and limited political freedoms. Individual freedoms are subordinate to the state and there is no constitutional accountability under an authoritarian regime.

Oligarchy

A form of government where power effectively rests with a small number of people, distinguished by royalty, wealth, family ties, education, corporate, or military control.