Miranda Company borrowed $100,000 cash on September 1, 2007, andsigned a one-year 6%, interest-bearing note payable. The required adjusting entry at the end of the accounting period, December 31,2007, would be
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A)
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Interest expense
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2,000
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Interest payable
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2,000
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B)
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Interest expense
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6,000
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Interest payable
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6,000
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C)
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Notes payable
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100,000
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Interest expense
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6,000
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Cash
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106,000
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D)
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Interest payable
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2,000
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Interest expense
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2,000
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E)
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None of the above is correct.
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