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2 September, 06:14

West County Bank agrees to lend the Block Builders Company $100,000 on January 1. Block Builders Company signs a $100,000, 6%, 6-month note.

What is the adjusting entry required if Block Builders Company prepares financial statements on March 30?

a. Interest Expense 3,000

Interest Payable 3,000

b. Interest Expense 3,000

Cash 3,000

c. Interest Expense 1,500

Interest Payable 1,500

d. Interest Payable 1,500

Interest Expense 1,500

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Answers (2)
  1. 2 September, 07:27
    0
    The correct answer is A.

    Explanation:

    Giving the following information:

    West County Bank agrees to lend the Block Builders Company $100,000 on January 1. Block Builders Company signs a $100,000, 6%, 6-month note.

    Monthly interest = 100,000*0.01 = $1,000

    Adjusting entry:

    Interest expense 3,000

    Interest payable 3,000
  2. 2 September, 08:11
    0
    the right answer is A
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