Use the Following Information for Questions
London Bank and Trust

question 38

Multiple Choice

Use the following information for questions
London Bank and Trust agrees to lend the Beckham Company £2,000,000 on January 1, 2010.Beckham Company signs a ₤2,000,000, 6%, 9-month note.
-Assuming that monthly accruals are not made, what adjusting entry is required if Beckham Company prepares financial statements on June 30?

• A)\(\begin{array} { l } \text { Interest Expense }&60,000 \\
• \text {Interest Payable. }&&60,000 \\\end{array}\)
• B) \(\begin{array} { l }\text { Interest Expense }&60,000 \\
• \text { Cash}&&60,000 \\\end{array}\)
• C) \(\begin{array} { l }\text { Interest Expense }&80,000 \\
• \text {Cash }&&80,000 \\\end{array}\)
• D) \(\begin{array} { l }\text { Interest Payable}&80,000 \\
• \text { Interest Expense}& &80,000 \\
• \end{array}\)

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