Ye Olde Christmas Shop Signs a Three-Month Note Payable to Help

question 89

Multiple Choice

Ye Olde Christmas shop signs a three-month note payable to help finance increases in inventory for the Christmas shopping season.The note is signed on October 1 in the amount of $30000 with annual interest of 6%.What is the adjustment to be made on December 31 for the interest expense accrued to that date if no adjustments have been made previously for the interest?

• A)increase Interest Expense $150 increase Interest Payable $150
• B)increase Interest Expense $300 increase Interest Payable $300
• C)increase Interest Expense $450 increase Interest Payable $450
• D)increase Interest Expense $1800 increase Note Payable $1800

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Definitions:

Sucrose

A disaccharide sugar composed of glucose and fructose, commonly known as table sugar.

Glucose

A simple sugar that is an important source of energy in living organisms and is a component of many carbohydrates.

Fructose

A simple sugar found in honey and fruits, used by the body as a source of energy.

Dynamic Equilibrium

The condition of a chemical reaction when the rate of change in one direction is exactly the same as the rate of change in the opposite direction (i.e., the concentrations of the reactants and products are not changing), and the