On December 1, Casualty Insurance Company Borrowed $50,000 at a 6.0

question 200

Multiple Choice

On December 1, Casualty Insurance Company borrowed $50,000 at a 6.0% interest rate from One Mutual Bank. The note payable plus interest will not be paid until April 1 of the following year. The company's annual accounting period ends on December 31 and adjustments are only made at year-end. The adjusting entry needed on December 31 is:

• A) Debit Interest Expense, $250; credit Interest Payable, $250.
• B) Debit Interest Expense, $250; credit Note Payable, $250.
• C) Debit Interest Payable, $1,000; credit Interest Expense, $1,000.
• D) Debit Interest Expense, $1,000; credit Interest Payable, $1,000.
• E) No entry required.

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Definitions:

Capability

Refers to the ability, skill, or proficiency to carry out a specific task or perform a certain role effectively.

Motivation

The extent to which persistent effort is directed toward a goal.

Support

Assistance or backing provided by an individual or group to help others in need or to achieve a goal.

Unfreeze

The initial stage of the change process where the goal is to overcome inertia and dismantle existing mindsets.