Johnson Issues a $3,000, 5%, 100-Day Promissory Note to Adam

question 112

Multiple Choice

Johnson issues a $3,000, 5%, 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) ? (Do not round any intermediate calculations. Round your final answer to the nearest cent.)

• A) Debit Interest Expense; credit Interest Payable for $25.00
• B) Debit Interest Expense; credit Interest Payable for $12.50
• C) Debit Interest Receivable; credit Interest Income for $25.00
• D) Debit Interest Receivable; credit Interest Income for $12.50

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Definitions:

Prenatal Development

The process of growth and development within the womb from conception to birth.

Infants

Young children from birth to one year of age, focusing on rapid physical and cognitive development during this early life stage.

Standing

The ability or act of supporting oneself in an upright position on the feet, often associated with developmental milestones in humans.

Medulla

A part of the brainstem that controls vital bodily functions such as breathing, heart rate, and blood pressure.